You may think getting pre-approved for your new home before listing your current home is counterintuitive. I have run across a few scenarios over the years of selling real estate where getting pre-approved prior to to listing a home for sell would have really helped the sellers.
Getting Pre-Approved for Your New Home Before Listing Your Current Home
Here are some scenarios I have heard about or had happen to clients over the years of selling real estate:
- You have a negative mark on your credit report that you were unaware of. Getting pre-approved will not only help you find that negative mark but also give you time to correct the problem.
- You might not be able to qualify for as much of a loan as you thought you would be able to qualify for. Finding this information out before you list your home for sale gives you time to preview homes with your agent in your new price range. You can decide if you are willing, or able, to move into a property in the new price range. Sometimes staying where you are is the best option.
- You might not be able to qualify for a loan at all. There are many reasons why you may not qualify for a loan and most of them can be fixed with time. Imagine the stress of having your current home under contract and finding out you do not qualify at all for a loan. At that point, renting might be your only option. Renting can be tough if you have pets and could be more expensive than your current mortgage.
In order to avoid last minute stress, start with the end in mind. Give your lender a call, go through the pre-approval process and make sure everything is on track for your new home purchase. Should you not already have a relationship with a lender, I'll be happy to make some recommendations.