BMO says only 62% of first-time home buyers are getting pre-approved before they go house hunting. That’s down from 73% in 2001.
Smart home buyers prepare themselves first. Why get pre-approved?
Security. With a pre-approval your rate is locked in.
Confidence. Knowing what homes you qualify for ahead of time avoids disappointment and saves you time.
Power. Pre-approved buyers appear serious and almost always have more negotiating pull with sellers and real estate agents.
Knowledge. The pre-approval process alerts you to problems with your application that could delay financing. In addition, by understanding the latest mortgage products you might find that you can afford more home for less money.
But what if rates go down and I am locked in, you ask? In this case most lenders will let you adjust to the better rate before closing.
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