You’re pre-approved, now what’s your next move?
You knew the first step to buying a new home was to get that pre-approval—to show agents and sellers you’re a serious buyer and to help any potential offers you make stand out. But now what? Your next moves are critical in the homebuying process. From maintaining your credit score to keeping your preapproval up to date, here are some important tips to ensure you continue on the smoothest path possible.
Keep in contact and keep it current
As you begin shopping for your home, it’s not unusual to find that taxes, assessments or insurance costs (all estimates based on assumptions) may be slightly higher or lower than anticipated. Let your mortgage professional know, so they can make the necessary adjustments to your preapproval amount, if applicable. With the technology loan officers have access to at Guaranteed Rate, they can often make these changes in a matter of minutes, and from anywhere.
That pre-approval doesn’t last forever
Pre-approval letters last anywhere from 60 – 90 days, depending on your lender. While Guaranteed Rate’s pre-approval letters are typically good for 90 days from the date your credit report was pulled, that three-month time frame can creep up fast. But don’t panic if you haven’t locked your loan and you’re running out of time. You don’t have to start from scratch. You’ll just need to update your information with your most recent income, bank statements and credit report.
Protect your pre-approval
Follow the credit dos and don’ts to ensure you maintain your credit score. You’ll want to think through (and consult your mortgage professional) before making any large purchases or career moves. You’ll also want to be careful about letting any friends or family pay for anything related to a new home. Always check with your mortgage professional first.
Low rates met with low inventory
While lower rates are enabling buyers to essentially buy more expensive homes with lower monthly mortgage payments, it’s also leading to a reduction in the number of homes on the market—further increasing competition. It seems the lower the rates, the higher the competition, and rates are at an all-time low. Freddie Mac reports the month of July has brought the average U.S. mortgage rate to below 3 percent for the first time in decades worth of data, with the average rate for a 30-year fixed mortgage at 2.98 percent and the average 15-year rate at 2.48 percent.
In the National Association of Realtors® recently released 2020 Member Profile, Realtors® cite low inventory as one of the top hindrances for potential buyers, with June 2020 total housing numbers 18.2 percent lower than last year.
Protecting your pre-approval and staying in contact with your mortgage professional is more important than ever. When you keep your loan officer informed, they can help find you the right mortgage that best suits your situation. The closer you are to a decision on the type of loan and length of term, the quicker your loan officer can prepare your file when you come across the right home.