Before you start shopping for a home, there are several things you’ll need to pull from your box of tools to increase the chances of a smooth and successful home-buying experience.
The real estate market exploded in 2020 as interest rates reached record lows and new homebuyers rushed to take advantage of affordable mortgages.
If you’re thinking about buying a home in 2021, you can expect the competition to remain fierce. But with the right mindset and approach, there’s plenty of reasons to be optimistic about landing your dream home.
Get mortgage preapproval
A preapproval is a powerful tool. It’s a commitment on how much the lender will loan to the borrower.
A preapproval is simply an endorsement from a lender that it will lend you the money you need to successfully get through the home-buying process.
Acquiring a preapproval also shows your initiative as a serious homebuyer who’s well prepared to make a competitive offer.
Getting a mortgage preapproval is mostly strategy because it allows you to present a credible offer to a home seller. Because it has the backing of a lender, your offer is likely to stand out from the rest.
And remember, you can always shop around and find better terms even if you have already been preapproved by a lender.
Shop around – for a loan
It’s tempting to jump onto your favorite real estate app and begin your home search. Instead, focus on the money and shop around for a loan.
Once you get a preapproval, you’ll have a solid picture of how much home you can shop for and how much the interest rate will be.
With that information, you might decide to shop around to see if you can land a mortgage loan with a lower rate or perhaps one that offers additional wiggle room to expand the home search.
Whatever the outcome, it’s important to shop around and find the best possible rate and terms before selecting a lender.
Remember it’s a seller’s market
Sellers are pickier than ever because they hold a competitive edge in today’s market.
With low inventory, sellers are getting more offers than they normally would.
With that in mind, make sure you prepare and work with your agent on determining a realistic range for an offer and be ready to show your preapproval letter, one of the most important tools of 2021 for aspiring homebuyers.