Nicole Mazzola

858.775.0328
nicole@aare.org

1020 Prospect Street #350
La Jolla, CA 92037

Why Talking to a Mortgage Specialist is Important Even if You’re Not Ready to Buy Just Yet

November 27, 2017

Many homebuyers are typically very excited to begin their house hunting journey. But they often wind up booking showings and visiting open houses before they’ve even had the chance to determine what their financial situation is like and how much they’d realistically be able to afford in a new home.

While it’s perfectly fine to casually browse around, it’s important that you speak with a mortgage specialist and begin the mortgage pre-approval process before you get serious about buying. Even if you’re nowhere near ready to make this big purchase, it’s still in your best interests to chat with a mortgage professional who will be able to identify what your financial history is like and how healthy your credit rating is.

Not only will this help you find out what type of mortgages are available to you, it will also make you more attractive to sellers and show them that you’re a serious buyer when the time comes. Here are some reasons why you should be proactive and speak to a mortgage specialist before you’re ready to buy.

Narrow Down Your Focus on Price

What you think you can afford and what you can actually afford when it comes to buying a house might be two completely different things. Even if you’re not necessarily ready to buy, you might still find yourself browsing online at potential listings. It’s quite possible for you to develop an affinity for certain homes that catch your attention that may be way out of your price range.

Nothing is more disappointing than getting your heart set on a certain home only to find out that you can’t afford it and would never be able to get approved for a mortgage to finance it.

Even if you did manage to obtain a home loan for a certain amount, you could find yourself being ‘house poor’ as a result of maxing out on your limit. And the more you owe on your mortgage, the more you’ll be paying in interest and other borrowing costs, making it that much more difficult to pay down your mortgage.

By speaking with a mortgage agent and getting pre-approved for a home loan, you’ll be able to set more realistic expectations about the price point you can comfortably afford. This will help you narrow your focus on the properties that fall within your price range.

Compare Different Loan Packages and Lenders

If you start shopping around for a mortgage today, you’ll have plenty of time to compare different loans and lenders and see what each have to offer. Getting pre-approved for a mortgage does not mean you’re obligated to go with a specific package. You’re still free to browse around and see which loan type is best for you that offers the most attractive rates and terms.

In fact, it’s recommended that you shop around with different lenders before settling on one, and a mortgage broker will be able to do all that comparison shopping without you having to do all the legwork yourself.

Be Seen as a Qualified Buyer in the Eyes of Sellers

The last thing sellers want to do is waste their time with tire-kickers who are just shopping around and not necessarily serious about buying right away. This is especially true in hot seller’s markets, which is currently the case in California. In sizzling markets like these, sellers will only entertain offers from buyers who have proven themselves to be qualified and serious about sealing the deal.

When you’ve finally found a home you’d like to buy and are ready to put in an offer, you’ll already be one step ahead of the game. Sellers will likely only look at offers that have come from buyers who have been pre-approved, putting you one step closer to landing that home you’ve been eyeing.

Get All That Lengthy and Cumbersome Paperwork Over With

When it comes to applying for a mortgage, there’s a lot of paperwork to fill out and sign. The amount of information that you have to supply is rather detailed and meticulous and might seem as if you’re signing your life away.

The documents that you will have to submit to your mortgage broker are quite extensive too. Your mortgage broker will want to see items such as a letter of employment, income statements, bank statements, tax filings, and documents outlining all of your assets and debts in order to accurately assess your financial standing and determine how much of a home loan you would be approved for – if you would be approved at all.

Applying for a mortgage can be burdensome and time-consuming. The sooner you start the process, the sooner you can get it over with.

Identify and Resolve Any Issues Earlier

If everything goes without a hitch, you should get a pre-approval letter within a week or two, depending on the lender and the volume of applications that are being assessed at that given time.

However, if there are any issues that come up when your finances and credit rating are being looked at, you’ll have more time to iron these problems out before you start searching for your next home. It would be upsetting to have a potential deal sidelined because of complications that arise during the mortgage approval process.

Get Your Credit in Good Standing

If your credit score is less than par for whatever reason, you’ll have some time to give it a boost before you’re ready to buy a home. Your mortgage specialist will be able to give you some pointers on how to improve your credit rating, such as ensuring all payments are made on time and in full, not maxing out your credit cards, keeping old credit, and not taking out any new debt.

By the time you’re ready to put in an offer on a home and have the formal mortgage approval process start, you may be able to add a few ticks to your credit score which will help improve the odds of mortgage approval and even lower your interest rate.

The Bottom Line

You don’t have to be ready to buy a home in order to start the conversation with a mortgage professional. Not only will you be able to find out how much you can realistically afford once you start the home search, you’ll also gain a better understanding of what your financial situation is like right now and take steps to improve it if necessary.