Want to buy a home? Get pre-approved for a mortgage first
My wife and I spent months tire kicking and going to open houses before we got pre-approved for a mortgage.
It was valuable time, certainly - we came to a rough agreement on what we wanted and what we didn't want.
But we really didn't have a clue what we could afford - that came later when we got pre-approved for a mortgage.
According to David Crowley, a downtown Boston broker who I chat with from time to time, home buyers who look before getting pre-approved are putting the cart before the horse.
In fact, if you don't have your pre-approval in hand, David won't be driving out to that open house with you.
No pre-approval, no housing hunting with David.
David's rule may sound arbitrary, but it really isn't.
He's seen buyers lose out on homes because they failed to get the ball rolling on the mortgage process.
Until then, buyers are operating without the kind of hard data to really know what they can truly afford.
So you think you have good credit? Well you'll find out fast when you get approved, David notes.
Other issues may also come up that should be addressed before you are ready to make a bid, not after.
David notes his pre-approval rule comes from hard experience. He recalls previously dealing with a couple who had saved up cash for a sizable down payment and thought they were home free. But they wound up having problems when the lender became skittish after looking more closely at their plans to sell their current home.
Anyway, that's my belated bit of Wednesday afternoon wisdom.
