I want to share an experience one of my clients has had over the past six months. She’d been renting for decades and was in her 50’s and running out of time to prepare for retirement. So, in January this year she decided to buy a house. Her target timeframe was March when she believed more homes would hit the market, giving her more choice.
I advised her to get pre-approved for a mortgage, even though spring was still several months away. In my experience, once someone starts house hunting, they often find a home before they expect to. If they’re not already pre-approved for a mortgage, it’s too late once they see that house. Sure enough, several ideal homes came and went, and my client kicked herself every time. Still, she said she’d wait until spring to get pre-approved.
When I asked about her concerns with getting pre-approved, she said she didn’t want to go through “all that,” then not find a house, and have to go through it all again a few months later. She was aware that loan approvals expire in 60 to 90 days. But she ignored the fact that approvals can be renewed with the same lender with only minor updates to the application.
The fact is, with very little downside, she could have been pre-approved from the start.
Now that interest rates are rising, she’s telling me she’d still like to wait to get pre-approved, because home prices might drop, or rates might come down again. Clearly there’s more going on here than simple financial caution.
I’m telling you this because I don’t want you to fall into the same trap. If you might want to buy a house, get pre-approved. It won’t hurt (much), and you’ll be prepared, just in case. Call me for a referral to a good lender. (718) 399-3320