How Pre-Approval Can Cut Down Your Home Purchase Timeline

The Baltimore housing market is moving at the blink of an eye—townhomes and suburban homes in the metro area and the popular Carroll and Anne Arundel counties are seeing a spike in buyer interest—creating a record low in median days for homes on the market.

Suburban neighborhoods like Laurel are seeing median sales reach record-breaking highs for the decade, according to the Baltimore Sun. Townhomes are selling like hotcakes, with a record nine-day average on the market. Prospective homebuyers need a competitive advantage—and pre-approval can provide just that.

5 Ways Pre-Approval Gets You Into Your Baltimore Home Faster

1. Assures Your Budget

Many home buyers believe the first step to finding a home is finding a great realtor. While a great realtor is an asset, getting pre-approval before you begin your home search can help your realtor customize the list of prospective homes to fit within your budget—which will cut down on time spent looking at homes that do not fit your finances.

Having a budgetary guideline will help you streamline the purchasing process and will make you less hesitant when it comes to closing the deal. Your lender will back you so that you can walk into open houses with this proof of lender backing. Once you have proof of funding and assets, our team, The Blazer Team Of Cummings & Co. Realtors, will be ready to take the torch and find the perfect home for you.

2. Makes You an Attractive Buyer

In a seller’s market, like the Baltimore area, the demand for homes is high, and the inventory is low. This means sellers have wiggle room to compare prospective buyers and raise the stakes through bids on the house.

Having a mortgage preapproval will set you apart—it assures that you have the financial backing to proceed to contract and closing, with reduced risk of the contract falling through. While a buyer’s market gives you more flexibility in haggling the asking price and purchase process, a seller’s market needs the assurance that pre-approvals offer.

3. Shortens Your Closing Time

The home buying process can last more than four months, according to Zillow. With an additional 30–45 days of closing time once it is under contract. This timeline can vary widely based on local inventory and, most importantly, financing.

Homebuying is a major investment, and most buyers use financing to cover a portion of the home loan. Lenders will look at your buyer viability, considering your proof of income, assets, and credit history for not only the months you are homebuying but also recent history.

Common Reasons Home Loans Fall Through

Two common reasons home loans fall through are financing-related: making a big purchase on credit or opening a new line of credit, according to Quicken Loans. By solidifying your financial status with your lender beforehand, you can enter the homebuying process with the security of financial backing, which will expedite the closing time.

Once a contract is in underwriting, the lender will have to process a list of procedures, including appraisal for the property value and completion of a home inspection to make sure the house meets the lender’s requirements for backing. Having the preapproval process taken care of will help cut down on time.

4. Offers Negotiation Leverage

After weeks of searching for homes, visiting countless open houses, and endless phone calls with your trusted realtor, when you finally find the one, you will want to have wiggle room for negotiations. Pre-approval from your lender will give you the specifics on exactly how much over the asking price you can venture to secure the highest bid. Knowing exactly what you are preapproved for will act as leverage if you get into a bidding war with other potential buyers.

Consider: If you and another prospective buyer both put in a bid at the asking price, you may have the upper hand to counter with a higher offer without having to waste time conferring with your lender about additional financing.

5. Gets You the Best Deal

There is nothing worse than finding the perfect home and then feeling the pressure to scramble to find a lender. When you secure pre-approval, you will have the time beforehand to do your research and secure the best deal. It’s recommended that you get rates from at least two or three lenders to find the right terms and interest rates.

Spending time researching types of lenders will allow you to explore the best lender for your type of mortgage.

• Direct lenders will process your loan from beginning to end, in-house. This means you will work will the same loan officer throughout the homebuying process.
• Mortgage brokers will act as a third party between you and mortgage lenders to do the leg work of solidifying the best deal in terms of length of the mortgage and interest rates on your behalf. A fee of typically 1%–2% will be built into the cost of your loan.
• Wholesale lenders package together mortgage deals at great rates, but you may have to go through a broker to utilize the benefits offered. This means you might not know exactly who your lender is, as you will not directly work with them.

Acquiring pre-approval from various lenders will give you a buyer’s advantage and solidify your place as a serious prospective buyer to sellers.

Pre-approval will allow for excellent realtors, like Derek Blazer Of Cummings & Co. Realtors, to work for you within your budget and vision for your new home without any disappointment. It’ll give you leverage to negotiate and close on your dream home in Baltimore faster and easier. Contact us today to learn more about the home buying process and begin the search for your new home!