Why Homebuyers Need Pre-Approval in 2022

 

You've probably heard that getting pre-approved for a mortgage at the start of the home-buying process is crucial, but what exactly does it imply and why is it so important? It's especially important to acquire a pre-approval letter before making an offer in today's market, where property prices are rising and buyer competition is fierce. There are a few reasons for this:

When it comes to buying a home this year, it's critical to be strategic and competitive. The only way to discover your exact price range and how much money you can borrow for your loan is to get pre-approval from a lender. In addition, being able to provide a pre-approval letter to sellers demonstrates that you are a qualified buyer, which can help you land your dream property in a highly competitive market.

Because of the scarcity of home inventory, there are far more buyers than sellers on the market, which means there is a lot of competition. In today's market, houses receive an average of 3.8 offers for sellers to consider, according to the National Association of Realtors (NAR). Bidding wars are still widespread as a result of this. If you get into a multiple-offer situation, which is very probable these days, pre-approval offers you an advantage. You'll be in a better position to win the bidding war if the seller understands you're qualified to buy the house.

Freddie Mac explains:

“By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.”

When the market is continuously changing, every move you can take to get an advantage as a buyer is critical. Prices are growing, interest rates are rising, and lending institutions are revising their rules on a regular basis. Because you'll need help to navigate these waters, it's critical to have a team of experts on your side, such as a loan officer and a reputable real estate agent, to ensure you're doing the necessary steps and demonstrating your buyer qualities when you find a home to buy.

A pre-approval letter is a game-changing piece of the homebuying process in a competitive market with little inventory. Pre-approval not only clarifies your house-buying budget, but it also convinces sellers that you are serious about buying a home.

If you're looking to buy a new home this year in Alaska, contact Vanna Siackhasone at 907-720-4663.


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