Buying a House in Chatham, Ontario - The Benefits of a Pre-Approved Mortgage
Before starting your search for a piece of real estate in Chatham-Kent, it is important to know what you can afford. Any Chatham Ontario Real Estate agent will tell you, that being pre-approved for a mortgage is one of the first steps you should take when buying a home.
Getting Started
The first step to being pre-approved for a mortgage is to go into your local bank and speak with a bank representative. After checking your credit history, employment and income, existing savings and debts, and a few other factors, your bank will provide you with an approximate amount of money that you will be able to borrow.
Should you spend the absolute maximum you are approved for? Probably not, but at least you will have a price range to help guide your Chatham-Kent real estate search.
Why Should I Get Pre-Approved by a Chatham-Kent Bank?
Great question. Other than providing your Chatham-Kent real estate agent with a price range that you can afford, being pre-approved for a mortgage has other benefits. For example, if a hot home comes on the market in Wallaceburg or Chatham, several bidders might be involved. Being pre-approved for a mortgage will allow you to act fast and speed up the offer and purchasing process. Sellers are far more likely to accept an offer if they know you’re capable of quickly acquiring the funds. With the rebounding Chatham Ontario real estate market, having the ability to act quickly when you find something you love will often make or break a deal. As well, pre-approval will allow you to offer a reduced closing period.
Pre-Approval Can Save You Money
That’s right, feel free to read it again if you need to… being pre-approved for a mortgage can actually save you money. How? It’s simple really. After being pre-approved, the mortgage rate you were quoted is often locked in for 90 days. With recent low mortgage rates, having a locked in deal with your bank will allow you to take advantage of the previous rate, even if mortgage rates spike.
For example, if a couple decides to buy a Chatham-Kent real estate property worth $200,000 and they get pre-approved for a mortgage at 3.9%, this rate will be protected for 90 days. Often, it will take home buyers months to find the ideal property. If the mortgage rate happened to jump to 5% during this time, an unapproved buyer would be forced to pay approximately $116 more each month on a 20-year mortgage. This would equal an additional $27,840 in interest over the duration of the mortgage.
Keep your Chatham-Kent Real Estate Search Realistic
One of the biggest issues for Chatham Ontario real estate agents and home buyers, is that buyers aren’t aware of what they can afford. Getting pre-approved will help your Chatham-Kent real estate agent show you homes that fit your needs and your budget. Visiting homes that are out of your budget can often be disheartening. Not only that, but it wastes time and money for all involved. Knowing what you can afford will keep your house hunt focused and will inevitably get you into a the perfect home quicker.
If you’re ready to start your hunt for a Chatham-Kent real estate property, head over to the bank and get pre-approved for a mortgage. It will help you save time, focus your search, give you leverage as a buyer, shorten your closing period, and could even save you money.
If you have questions about the pre-approval process of the Chatham-Kent real estate market, feel free to contact me.