A pre-approval is the first big step towards purchasing a home. It increases your chances of having your offer accepted and provides you with a detailed quote to use for your budgeting. While in a 45-day window, multiple credit checks from mortgage lenders are recorded on your credit report as a single inquiry. Creditors understand that you are only going to purchase one home. Therefore you absolutely should get pre-approved for a mortgage to find out what your purchasing power could be before wasting time shopping for a house you may not be able to potentially purchase or you may miss out on a home you really wanted but you thought you couldn’t afford. The effect of a mortgage inquiry is very minimal on your credit score.
What is the difference between Pre-Qualification VS Pre-Approval?
Pre-Qualification is a lender’s estimate of the loan amount you can borrow. It is a quick assessment by a lender of the buyer’s financial situation based solely off of what a buyer tells a lender, and not supported by any proof, documentations, or verifications.
Pre-Approval is a written lenders commitment to grant a max home loan amount a buyer can afford. This requires home buyers to fill out an application that allows the lender to determine and verify their financial situation. Like a borrowers DTI (Debt to Income ratio), ability to repay, and credit worthiness. Pre-Approval > Pre-Qualification
Why should I get a inspection when purchasing a home?
Weather a resale or a new build. A quality licensed professional home inspector can reveal critical information about the condition of a home and its major systems. This makes the buyer aware of what costs, repairs, and maintenance the home may require immediately, and over time. With newly constructed homes, a home inspection allows you to get ahead of your home purchase. On a resale, you can only inspect the home after the fact. All you can do is repair an issue or cover it up, but a well-timed inspection on a new build allows your builder to get to the root of the problem before it’s too late.
What major issues should I be aware of on an inspection?
Outside of wear and tear or cosmetic damage. The top five things a home inspector looks for, and what I call ” the major ticket items” are; Foundation, Roof, Plumbing, Electrical, and HVAC systems. When deficiencies are discovered on any major system, then a qualified licensed professional of that specific system would be recommended by the home inspector. After all these professionals work on their specific trades all day every day and can thoroughly diagnose or fix the problem.
Is a home warranty necessary when purchasing a home?
Weather you request to include it in the sale contract, or purchase it on your own after closing. A home warranty is a very important step many homeowners forget until it’s too late!
A home warranty protects a home’s aging systems and appliances. Since majority of buyers purchase homes that have already been lived in, the systems and appliances usually aren’t brand new. In time, these will inevitably fail, as all systems and appliances have shorter lifespan compared to the home’s structure. When a home is purchased, much of the lifespan has already been used up. Sometimes we do not know how the previous owner utilized or even had preventative maintenance to their systems or appliances.
What can a home warranty do for me and my new home?
A home warranty will repair or replace a home’s systems and appliances when they fail from normal wear and tear. Home buyers should remember to purchase a home warranty, if not including it in the sales contract at closing, within 15 days of closing to get great deals on their protection plans. Not all home warranty companies are the same or provide the same coverage. You should research and compare companies and coverages that best suits your needs. A little can go a long way. After all, a home is a major investment.