So you’ve decided to purchase a home? Congratulations! This is an exciting decision and a huge step forward towards investing in your financial future. But now what? Where do you even begin?!?! We’re glad you asked! The first step when shopping for a home in Richmond, CA is to get a mortgage pre-approved and here’s why:
Helps to Determine Your Budget
When you were a teenager, did you ever see a celebrity and you just knew you would marry that person? You instantly fell in love and could picture yourself living happily ever after? Then one day you realized that you probably would never meet that star and reality was crushing. Just me? Um… well… then let’s move on.
Falling for a celebrity is like house hunting without a budget. It’s throwing reality and caution to the wind and dreaming of something you may not ever get. It sets expectations high and leads you on a journey that can only lead to disappointment.
Yes, I know this from experience, too. Two years ago my husband (nope, he can’t sing or act but he is one amazing nurse) and I were house hunting. We started on Zillow and watched countless hours of HGTV and Magnolia Network. I wanted an acre lot, pool, raised garden beds, five bedrooms, and a gorgeous updated kitchen. Then we started touring new build homes and I needed Excedrin and oxygen to get me through the sticker shock. I saw the prices of the homes but had no idea what the monthly payment would be, how fluctuating mortgage rates would impact that payment, or how much the added taxes and fees would increase our payments. I decided that we had three choices: 1) sell a kidney, 2) move to Arkansas where things are cheaper, or 3) compromise and refocus our needs vs. wants list. We needed a reality check and it wouldn’t be easy.
And that’s why getting pre-approved is the first step when shopping for a home in Richmond, CA. It will help you to know your budget, your monthly payments, and your lender can also give you the roadmap to getting your finances in order. It will save you time so you can avoid spending hours searching and viewing homes that are out of your price range and it will also save you the heartache of falling in love with a home that just won’t happen. (Been there, done that, too.)
Shows You’re a Serious Buyer
If the past couple of years have taught us anything, it’s to be prepared. Let’s say that you find the perfect house when you’re shopping for a home in Richmond, CA and you’re ready to put an offer on it… and so are four other couples. Being pre-approved means that you have done your homework and you have the funds ready to move forward. From a seller’s point-of-view, this could put you ahead of the competition because you’re qualified to purchase the home and they don’t have to wait for you to be preapproved and possibly denied. The waiting could put their home sale at risk if you and the other offers find another home and renege their offer.
And since we’re talking about the time it takes to get pre-approved, let’s focus for a moment on the paperwork you need to gather to get pre-approved. You’ll need your social security number and proof of identity for the lender to run a credit check, proof of income for the last two years which may involve W-2s or pay stubs, and documentation of other assets you may have like investments. If you have family members who are giving you money towards your house, you’ll need a letter from them, too.
While these documents aren’t too difficult to obtain, you should also consider that it can take up to ten days to get pre-approved. Remember the 2008 market crash when many homes had adjustable loans and foreclosures flooded the market? To avoid that from happening again, the loan process is a bit more complicated and the loan options that were available back then are no longer available now. So if you’re planning on shopping for a home in Richmond, CA, ten days can be a long time to wait for a pre-approved loan if another offer already has proof of funds.
Close on Your New Home Faster
Let’s say that your offer was accepted when you were shopping for a new home in Richmond, CA and you weren’t pre-approved. Woo hoo! You’re no doubt wanting to move into your new home as soon as possible. However, it can take anywhere from 35-50 days to close… and that’s just a broad estimate that could be affected by many factors. If you’re not pre-approved, that’s just one step that could prolong the process. When you start your relationship with a great mortgage officer as you begin shopping for a home in Richmond, CA, the process is likely to go smoother since you can have everything in order and the lines of communication will be open.
Not sure how to find a great lender or do you have questions about shopping for a home in Richmond, CA? Call the Rick Fuller Team at (888) 950 – RICK. We have partnerships with reputable lenders who can answer all of your questions and can help you through the pre-approval process. Better yet, they can share with you loan options and what’s happening with mortgage rates so that you can hopefully avoid any surprises for a smooth transaction. Another benefit to working with the Rick Fuller Team is that we know the local market and our agents live where we serve. We’ll review your budget and share with you the best available homes on the market. We’ll discuss your wish list versus your needs and give you a variety of options so that you can make the best educated decision for you and your family. Give us a call today! We’re ready to give you an experience you’d be excited to tell a friend about!
