The Seattle real estate market is hot right now, with a lot of competition for limited inventory. And while home prices are expected to rise more slowly in 2017, the market will still be very competitive.
This is all the more reason for Seattle home buyers to get pre-approved for a mortgage loan, before entering the market. We’ll look at the benefit of a Seattle mortgage pre-approval in a moment. But first, let’s talk about what it entails.
What Is Mortgage Pre-Approval?
The pre-approval process varies slightly from one lender to the next, but it usually works like this. The borrower fills out an application and provides supporting documents like W-2 forms, tax returns, bank statements and pay stubs. The lender reviews these documents and also checks the borrower’s credit history.
Based on this analysis, the lender will pre-approve the borrower for a certain amount of money. The borrower can then shop for a home within that price range, with the confidence of knowing there’s a good chance of final loan approval.
You might see some of the benefits of a Seattle mortgage pre-approval already, based on this explanation. But let’s flesh them out anyway…
5 Reasons Why Seattle Home Buyers Should Get Pre-Approved
If you’re paying all cash for a home, you can stop reading right here. You won’t need a mortgage loan. But if you’re like most home buyers in Seattle, you’ll need a loan to help you finance your home purchase. And that’s where pre-approval comes into the picture.
Being pre-approved for a loan offers several benefits:
1. Sellers will take you more seriously.
We’ve talked about the competitive nature of the Seattle real estate market. In this kind of market, it pays to have your financing lined up before making an offer. The last thing you want is for a seller to dismiss your offer because they don’t take you seriously.
If you include a mortgage pre-approval letter with your offer, the seller will be more inclined to accept it. Being pre-approved by a Seattle mortgage company shows the seller that (A) you’re serious about buying their home, and (B) you have a high likelihood of getting a loan.
2. You’ll have an easier time finding a real estate agent.
Seattle real estate agents prefer to work with buyers who have been pre-approved by a lender. Put yourself in their shoes for a moment. Imagine that you spend dozens of hours helping a particular client, only to find out that they can’t qualify for financing. That’s not a smart way to run a business. A mortgage pre-approval will help you get a talented, experienced agent onto your team.
3. You can narrow down the market to match your budget.
According to Realtor.com, there were roughly 1,200 homes for sale in Seattle when this article was published. And that was just within the immediate vicinity. If you include the broader metro area, that number increased several times over.
The point is, there are a lot of homes to choose from. As a home buyer, it’s important that you narrow down your home search to the properties you can afford. This will save you a lot of time and energy, and will also improve your chance for success.
This is another area where a Seattle mortgage pre-approval can benefit you. By getting pre-approved before you start house hunting, you’ll have a better idea of what you can afford to buy. Then you can shop confidently within that price range.
4. Your house-hunting process will be more efficient.
This is an offshoot of benefit #3 above. In order to find a suitable home in a competitive market, you have to view a lot of properties in a fairly short time. That’s because the market changes constantly. So efficiency is key. Being pre-approved for a Seattle home loan will make you a more efficient house hunter. You’ll be able to zero in on a specific price range, and weed out the homes that are too expensive.
5. You’ll have a better chance for success!
The bottom line is that mortgage pre-approval increases your chance for success. It helps you focus your efforts. It makes sellers more inclined to accept your offer. It will help you get a talented, experienced agent on your side. In short, it will make you a more successful home buyer.