If you’re in the market to purchase a home, you may have already realized that the inventory of available houses in Richmond, VA, is limited, which is making competition stiff. That is to say, if you’re looking to buy both an already existing home or new construction, you’re in for a challenge, because it’s definitely a seller’s market! 

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 Does Getting Pre-Approved Mean? 

Firstly, when we say “pre-approval,” we are talking about a document in the form of 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 Do 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 preapproval process is essentially a mortgage application, which means your lender or loan officer will want to take a comprehensive look at your finances. Be prepared for a hard pull of your credit score! 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. 

What Are The Benefits of Getting Pre-Approved?

Our real estate team and most professionals in the industry recommend getting pre-approved before you start spending time looking for a home. The most important reason is that it gives the seller the confidence of knowing your qualifications have been checked. This gives them comfort when dealing with you because they know your offer is less likely to fall through if everything has been verified by an underwriting team. With the backing of a pre-approval, you and the seller will know that you have the financial credentials to back up the offer you’re making. In fact, in a seller’s market, some homeowners may not even waste their time with buyers who haven’t been preapproved! Another very 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 Richmond, 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 homebuyers, both new and old, 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 Richmond, 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 804-508-6689!

P.S. If you’re thinking about selling, now couldn’t be a better time to get top dollar for your home! We offer comprehensive programs and guarantees that will benefit you greatly during your move. Please reach out now if you are considering making a move so you can take advantage of this hot market!