When you start shopping for your first home, or your next home, it is easy to get excited and contact your realtor immediately after finding a few hot properties online. Truth is, that is not step one. Just like any realtor who has experience and wants to guide you into that new home as effectively as possible, Step One is always getting pre-approved. Most clients understand the premise of getting a pre-approval before shopping but buyers are sometimes insulted by the request.
Here are the top reasons why you should be getting pre-approved immediately.
1. Setting a reasonable budget & Determining a Price Range.
2. Rate reserval (Reserving a mortgage rate for up to 120 Days).
3. Making your offers more competitive.
4. Being Prepared for the process.
All these reasons are pretty self explanatory. Most buyers understand that setting a reasonable budget, reserving an interest rate and making their offer seem more serious by having a pre-approval are essentials to the process. Most buyers however, don’t understand the organisation of a mortgage application and the delays of getting it done once their offer does get accepted.
What do we need to be prepared for?
This is where experience comes in! Being prepared is 50% of anything, and in real estate, being halfway done makes your life all that much easier. Once your offer gets accepted, you typically only have about 12-15 days to complete all of your conditions. These include finance, inspection, document review, and maybe more. They can be very stressful and unfortunately we cannot prepare for any other condition apart from financing. So why not get a head start?
First, when applying for a mortgage, there are a slew of documents your mortgage broker is going to need from you, they range from pay stubs, letter of employment, and recent bank statements all the way to donation letters, financial statements and commission reports (all of this depends on your type of employment). Finding out what your broker is going to need from you can make or break your timeline for financing. Getting this pre-accepted offer will relieve stress and give you time to focus on more important things, such as inspection.
Second, You will not have time to “rate shop” once your offer gets accepted. Speaking to your mortgage broker before the process begins to discuss rates, variable vs. fixed, or 25 vs. 30 year amortisation is something that should be done while you’re shopping for a home, so that once the wheels are in motion you can act quickly and more efficiently.
Last but not least, you want to be able to have time to build a solid relationship with your mortgage broker. At the end of the day, your realtor should act as your consiglieri (yes, I had to add a godfather reference) and your mortgage broker is somewhat of your second line of defence. It should be someone you trust, someone you have confidence in and someone that you can refer to for any questions or concerns you may have throughout the process as well as once it is done.
Now that you know why you should be pre-approved, what are you waiting for! 
