Should You Browse For Homes Without A Pre-Approval?

Whether you’re in the market to purchase a home or not, you’ve probably heard that the inventory of available houses is limited in Hampton Roads, VA, which is making competition stiff. With that being said, if you are looking to buy in these unique conditions, you’re in for a challenge, because it’s definitely a seller’s market. 

We’re going to get right to it and answer the question in the title of this blog: although you can view homes without getting pre-approved, to get a jump on the competition in this tough market, one of the best things you can do is make sure your financing is lined up by getting pre-approved before you even start shopping for a home. 

What Even Is a Pre-Approval? 

Before we tell you why getting pre-approved is recommended by our real estate team and most other professionals in the industry, we’ll explain what a pre-approval even is. When we say “pre-approval,” we are talking about a letter that your mortgage lender gives you, stating that they are tentatively willing to lend you money up to a certain loan amount. However, it is not a guarantee your loan application will be approved, but it at least shows the seller you mean business and are likely to secure the financing needed to seal the deal. 

How Can You Get Pre-Approved?

To pre-approve you, lenders look at your income, assets, and credit score and determine what loans you could be approved for, how much you can borrow, and what your interest rate might be. The pre-approval process is essentially a mortgage application, which means your lender or loan officer will do a hard pull of your credit and take a comprehensive look at your finances. You will most likely have to provide the following:

  • W-2 statements
  • Pay stubs
  • Bank statements
  • License
  • Social Security number

Once you submit this information to your lender, you can expect to receive your loan estimate in about 3 business days. These don’t last forever, though. Check the expiration date, but typically, a pre-approval letter is good for 60-90 days. 

Benefits of Getting Pre-Approved

In this tough market, we are seeing some homeowners not even allow prospective buyers to step through the door without a pre-approval! Since competition is fierce and sellers have the upper hand, they don’t want to waste time with people who don’t have the financial credentials to back up the offer they’re making. A pre-approval letter gives the seller the confidence of knowing your qualifications have been checked, thus giving them comfort when dealing with you because they know your offer is less likely to fall through if an underwriting team has verified everything. Another important part about getting pre-approved is that it helps you, as the buyer, understand your budget and what you can afford every month. You’ll save precious time by only viewing homes you can afford and avoid wasting time seeing ones you can’t!

Who Can Pre-Approve Me?

The Reynolds Team in Hampton Roads, VA, knows how stressful it can be to begin the home buying process. Since it’s likely the biggest asset you will ever acquire, it’s no wonder many first-time homebuyers quickly become overwhelmed. Ensuring that you are pre-approved before you start looking for homes is an important step that many families tend to ignore while they browse Zillow and other similar websites without any serious financial backing! The Reynolds Team in Hampton Roads, VA, and our in-house mortgage lending company, Empower Home Mortgage, are fully-equipped to help prospective homeowners understand what they can afford, what they’re approved for, and find their dream home! Our top priority is always to foster confidence and understanding of these complex topics, and we strive to help you become an expert in all things home buying by the end of your journey. Please reach out to us now so we can help you get things set up the right way so you are ready to take action when your dream home shows up! Call us at 804-486-7388!

P.S. We know not only first-time home buyers are looking to buy a home. Right now is a perfect time to sell your home and take advantage of this hot market by getting top dollar for your home. We offer programs and guarantees that will benefit you in your move. Please reach out now if you are considering making a move so you can take advantage of this hot market!