Many homebuyers hope for a smooth transaction once they decide to make one of the biggest investments of their life, so they try to prepare as much as they can for home ownership and everything that comes with it. Still, many homebuyers avoid an actual visit to the lender and rely on different online tools to find out how much house they can afford. While online mortgage calculators can give you a general idea of the mortgage costs and your borrowing power, the safest way is to have a lender take a look at your finances given that every case is specific and needs to be treated that way. Going home shopping without a pre-defined price range can be a waste of time and lead to unnecessary disappointment, so make sure to do the prep work before you actually visit any homes. Mortgage pre-approvals are a step in the right direction as they come with many benefits buyers are not always aware of. Here is how a pre-approval will give you a clear advantage in the Calgary SE market.
Knowing The Exact Price Range And Interest Rate Perks
The lender won’t only consider the price of the home, but make sure that you can cover other costs as well like legal fees, the down payment and closing costs when they pre-approve you for a certain price range. Certain banks, like the Royal Bank of Canada, can issue pre-approvals free of charge, plus, you can lock in the pre-approved interest rate for up to 90-120 days which protects you from a volatile market. For new construction, it’s even up to 180 days. If the interest rate should go up within the 120 days, you will not be affected, and if it goes down, the lender will honor the new lower rate.
Sellers Prefer Buyers With Pre-Approvals
Sellers appreciate a buyer who can prove in black and white that they can afford their home. A pre-approval will give you a great advantage and earn you the trust and respect of every seller from the beginning. Sellers will see you as a serious buyer as opposed to someone who hasn’t worked out their finances yet.
It Boosts Buyers’ Confidence
Knowing your financial standing and how much you can borrow will not only give you peace of mind but also more confidence when looking for a home. Without a pre-approval, homebuyers expose themselves to the risk of looking for homes above their budget only to find out later they cannot afford it. Moreover, they will seem more insecure than someone who knows exactly how much they can afford.
Buying a home is stressful, but buyers can minimize the stress and the risk that comes with a home investment by setting their priorities right. Most of the time, it means handling the finances first and the best way is to start with a mortgage pre-approval and finding a great real estate agent. If you want to know how home prices in Calgary SE rank, click here or give me a call 403-278-6041.