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First-time homebuyers can quickly become overwhelmed, and navigating the ins-and-outs of the home buying process can become daunting quickly. If you want to jump right into home shopping, you’ll want take the time to get a mortgage pre-approval first, unless you have the cash to pay for your home in full. Here are some reasons why.
Unless you’re paying cash for your home, you’ll need to take out a loan to purchase your home in Denver, Colorado. At this point in the home-buying game, you don’t need to know everything about mortgages; you just need to pre-qualify for one. If you already have an agent you want to work with, they can suggest mortgage brokers they’ve worked with to get you started with the loan pre-approval process.
Quick, what’s your housing budget? If you struggled to answer that question, you’re not alone. Many first-time buyers are unsure of how much they’re able to spend on a house or are just unsure of their target price range when home shopping in Denver, Colorado.
The mortgage pre-qualifying process will provide an estimated range that a bank might lend you. A mortgage pre-approval, however, will pinpoint precisely how much a bank will give you to finance the purchase of your home, preparing you for working with your agent.
If you saunter into your nearest real estate office, expecting to go house hunting the same day, you’ll be hard pressed to find an agent to show you listings without a mortgage pre-approval letter in-hand.
Picture this: an agent — who works on commission — spends two days showing an eager couple homes in and around Denver. The potential buyers find what they consider their “dream home” and want to put an offer on the house. The agent then tells them that they must get pre-approved for a mortgage before they put an offer down, so they scramble to get paperwork together.
A day or two later, after helping the potential homebuyers find a mortgage broker to begin the pre-approval process, the real estate agent discovers that their buyers have no credit and therefore, no bank will agree to finance their loan. That agent just lost days that could have been spent showing approved buyers homes.
Like anyone else, real estate agents don’t want to waste valuable time, and there’s no point in showing a potential buyer a home, only to find out that a bank will not lend them the money to make the purchase.
As mentioned earlier, pre-qualifying for a mortgage is slightly different from being pre-approved. When you’ve found the perfect Denver home, you’ll want to place an offer as soon as possible. If your chosen home is a hot property and you’re up against a buyer who has only been pre-qualified, you may have an advantage — your mortgage pre-approval indicates that you have the means to purchase the house.
Beginning the home buying process with a mortgage pre-approval letter in-hand can indicate to an extremely motivated seller that the closing process will happen quickly. Because you’ve taken the time to get pre-approval, you’re ready to begin finalizing your mortgage, which is often a lengthy process.
If you’re at the beginning of your house shopping journey in Denver, Colorado, do yourself a favor and start by getting pre-approved for a mortgage. Your real estate agent will thank you, and the seller of your future home will appreciate your efficiency.
Do you have questions about mortgages? Or are you ready to buy a home in Denver and want to apply for a home loan? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs with flexible qualification criteria. Contact us today with any questions you have about home loans.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.