Obtaining a Chicago home loan can be a life-changing event for many homebuyers. Whether you are moving for a job or just need a new atmosphere, buying a home will change your future. There are a couple of obstacles to conquer before you secure your new residence. The number of houses on the real estate market has decreased in the past few years. Interest rates are historically low. These factors have created a great deal of competition between consumers. In order to combat these trends, buyers need to be prepared. Sellers want to know that a buyer is legitimate and actually has the financing to purchase the home. Pre-approval is the best way to prove to a seller that you are serious. Here are four reasons to get pre-approved, so that you can secure your Chicago home loan.
1. Prequalification is too informal.
The terms “prequalification” and “pre-approval” are often mistakenly interchanged. In fact, these words do not hold the same meaning.
The problem with prequalifying:
- Only estimates the buyer’s possible purchase power.
- Does not hold as much meaning as a loan approval.
- The borrower’s information has not been properly documented and reviewed.
- Does not include a credit history analysis.
- Not a guarantee or contract to provide financing from the lender.
To be pre-approved for a Chicago home loan, you will need to submit an application with some simple personal records. These documents include your W-2s from the past two years, your latest bank statement, and your most recent paystubs. The lender will need all this information to verify your financial status and employment history. You may also be required to provide material related to self-employment, divorce and alimony, investment properties, and immigration status. The borrower and any co-borrower’s credit record will be examined as well. Many lending institutions give clients the option to either complete the application in person or online.
2. Reduce your stress.
The buying process is always easier if the buyer knows exactly how much they can offer for the property they desire.
- Avoid house-hunting heartache by knowing how much you can afford ahead of time.
- Select homes in the proper price range.
- Allows the borrower to create a reasonable budget.
- Immediately accept a seller’s offer or counter-offer with a lower price.
- Helps the buyer create a financial budget.
3. The power of negotiation.
U.S. housing inventory is currently down. You may find yourself battling against other consumers for a particular property. In order to have the upper-hand in negotiations, buyers should get approved before they start looking for a home.
- Ability to present a strong purchase proposal.
- Be well-positioned among the competition.
- Sellers will focus on bids presented by approved buyers.
- Let sellers know that your financing will not fall through at the last moment.
4. Establish a working relationship.
Purchasing a home is a very complicated process. It’s wise to research potential agents and lenders. Your loan officer should be motivated, experienced and knowledgeable about the mortgage industry. The real estate agent should be familiar with the neighborhoods and property in the area. Since you will be working closely with these individuals, you will more than likely develop relationships with each of them. Let your professionals get to know you and your needs. This will allow them to suggest better solutions for your financing and housing. Agents will take their job more seriously, if they know a buyer is already authorized for a Chicago home loan. Don’t be afraid to ask your lender or realtor any and all questions you may have about purchasing a house.
Are you interested in a Chicago home loan? Complete a Cornerstone online application today. Cornerstone’s experienced loan officers will guide you through the home buying process.