Why Be Pre-Approved For A Mortgage Before Searching for Pennsylvania Horse Property?
You have put aside some savings from each pay period for several years in order to have a down payment to buy your first horse property in Eastern Pennsylvania. You are now anxious to get started with your search so that you can have your horses home with you. It will be wonderful to walk out your door and visit with them at anytime.
But, wait! Before you start, there is an important step to take.
No, it is not to find a real estate professional to help you. That is the second step.
Before looking for the right real estate professional to assist you in your search, there is one other important item that is a MUST DO. That item is to first find a reputable, local lender that will lend funds on this type of property. Keep in mind, not all lenders will mortgage farm properties or properties with acreage. The next step is to have the lender pre-approve you for a mortgage before going out and actually starting your search.
Why is it so important to get pre-approved for a mortgage before starting the search for horse farms?
To begin with, it is important to know what the highest price limit your financial status will allow. Otherwise, you may be disappoimted. For example, you have estimated that you can afford to buy a farm for $500,000 maximum. You start looking at properties up to that amount and find one that you absolutely love at $475,000. Now you go to get your pre-approval from the lender so that you can put in an offer. After speaking with the lender, it is determined that you can only go up to $400,000. There goes your dream farm.
Another reason for getting pre-approved before your search, is that the Sellers, and real estate professionals, prefer working with Buyers that are already pre-approved. This way they know that they are not wasting their time showing a property to someone because they already qualify for a property within that price range. The real estate agents are not tour guides, nor do the Sellers have the time to waste having someone that may not qualify looking at their property.
Here is another scenario: You find a farm and you are ready to put in an offer. You find out that there are a couple of other parties that will be putting in an offer on it. The other parties are already pre-approved and ready to move with the offer while you still have to go through the pre-approval process. So, you figure on putting in an offer without the pre-approval and give the Seller an I.O.U. for the pre-approval. This will not work. Without the pre-approval, the Seller has no idea if you are able to buy the property without having the pre-approval in hand. Chances are that the Seller will choose one of the other offers presented that have pre-approvals already, even if your offer was the best out of all of them.
As you can see, there are several reasons for Buyers to get pre-approved for a loan before doing the actual search. In the long run, you will be glad you did.