Pre-Approval in 2023: What You Need To Know
Pre-Approval in 2023: What You Need To Know
One of the first steps in your condo or home-buying journey is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you. Business Insider explains:
“In a preapproval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”
Basically, pre-approval gives you critical information about the buying process that’ll help you understand your options and what you may be able to borrow.
How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for condos or homes because you’ll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.
Pre-Approval Helps Show You’re a Serious Buyer
Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their property. A recent article from Forbes notes:
“From the seller’s perspective, a preapproval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”
This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:
“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.
The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”
Bottom Line
Getting pre-approved is an important first step toward buying a condo or home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their condo or home. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase in today’s market. Contact us at 734-761-3060 or info@condohotline.com to discuss your path to ownership!
4 Things Every Renter Needs To Consider
As a renter, you’re constantly faced with the same dilemma: keep renting for another year or purchase a condo or home? Your answer depends on your current situation and future plans, but there are a number of benefits to homeownership every renter needs to consider.
Here are a few things you should think about before you settle on renting for another year.
1. Rents Are Rising Quickly
Rent increasing each year isn’t new. Looking back at Census data confirms rental prices have gone up consistently for decades (see graph below):
If you’re a renter, you’re faced with payments that continue to climb each year. Realtor.com recently shared the September Rental Report, and it shows price increases accelerating from August to September (see graph below):
As the graph shows, rents are still on the rise. It’s important to keep this in mind when the time comes for you to sign a new lease, as your monthly rental payment may increase substantially when you do.
2. Renters Miss Out on Equity Gains
One of the most significant advantages of buying a condo or home is the wealth you build through equity. This year alone, homeowners gained a substantial amount of equity, which, in turn, grew their net worth. As a renter, you miss out on this wealth-building tool that can be used to fund your retirement, buy a bigger home, downsize, or even achieve personal goals like paying for an education or starting a new business.
3. Homeowners Can Customize to Their Heart’s Content
This is a big decision-making point if you want to be able to paint, renovate, and make home upgrades. In many cases, your property owner determines these selections and prefers you don’t alter them as a renter. As a homeowner, you have the freedom to decorate and personalize your home to truly make it your own.
4. Owning a Condo or Home May Provide Greater Mobility than You Think
You may choose to rent because you feel it provides greater flexibility if you need to move for any reason. While it’s true that selling a home may take more time than finding a new rental, it’s important to note how quickly condos and houses are selling in today’s market. According to the National Association of Realtors (NAR), the average home is only on the market for 17 days. That means you may have more flexibility than you think if you need to relocate as a homeowner.
Bottom Line
Deciding if it’s the right time for you to buy is a personal decision, and the timing is different for everyone. However, if you’d like to learn more about the benefits of homeownership, let’s connect so you can make a confident, informed decision and have a trusted advisor along the way. Contact us today at 734-761-3060 or info@bouma.com.
Saving up for a New Home or Condo? Here Are All the Costs You Need to Know
Once you’ve found the perfect home or condo and secured the loan, all that’s left to do is start chipping away at those mortgage payments…right? In actuality, there are a handful of other, often-overlooked expenses that come with buying a home, but as long as you know what you’re getting into, they’re plenty manageable.
Take a look at our comprehensive list of all the costs you need to know when buying a home or condo.