So you are in the market to buy a Lake Tahoe home. Where to start? The most important place to begin is finding out how much you can spend on a home to buy. This is best accomplished by meeting with a licensed mortgage broker with the purpose of getting pre-approved for a loan. Now, let’s clarify first that there is a difference between getting pre-qualified and pre approved. A big difference in fact. Pre-qualified is when you provide a lender or bank your basic financial information such as income, debt and assets. After reviewing this information, a lender will give you an idea of the mortgage amount you could qualify for. Keep in mind, there is no fee to do this and the process can be as simple as a phone call to a bank or even a quick online form. It also does not evaluate your credit report or other in depth factors that could affect your ability to purchase a home. On the other hand, obtaining pre-approved status involves completing an actual mortgage application that may cost an application fee. You also have to provide the lender with the appropriate documentation, such as tax returns, proof of income and financial statements so that they can do an extensive check on your credit and financial background. Once this has been evaluated, the lender will give you a specific mortgage amount as well as a good idea of the interest rate you will be charged. As you can see, there is quite the difference between the two.
Now that we have addressed this, let’s discuss why it is important to get pre approved before you start searching for homes.
You know you can buy a home
Searching for a home to buy is a process, for both the client and your Lake Tahoe Realtor®. Nothing is more frustrating for you and your Realtor® than to spend hours and days looking at several different homes only to find out you don’t qualify for needed financing.
You know how much you can spend
This saves time and helps define your search. Once you know how much you are pre-approved for, you can then go to your Lake Tahoe Realtor® with your pre-approval letter and they can look for homes in the MLS within that price range. The MLS search will yield results that you can afford and you don’t waste time getting attached to homes outside of your budget. You can also arrange to be notified via email of all new listings that come on the market within the parameters you set. If one pops up that grabs your attention, you are one step ahead of the competition.
A Pre-Approval Letter gives you more leverage in negotiations
When competing for the purchase of a home, sellers will usually lean toward a buyer that has provided a letter of pre-approval over a buyer that is only pre-qualified. However, a letter of pre-qualification is better than nothing.
Now, if you decided to start looking before getting pre approved and found a home you absolutely love, don’t wait. Contact your local Lake Tahoe Realtor®, put in an offer. Within that offer, you can state within that offer a time-line in which you will get pre-approved in order to assure the seller that they aren’t taking their home off the market for too long of a time prior to being assured that you qualify. As real estate is constantly changing, so are the homes on the market. If you know you have the financial ability and proof to afford a home, get the offer in and then speak with a preferred lender as soon as possible. As you can see, the benefits of getting pre-approved ahead of time is the best way to get the home buying process started. If you have any questions regarding the buying process, give us a call at 530-577-0389. We are more than happy to connect you with respected lenders with whom we have worked successfully with in the past.