Achieving one’s dreams in life requires preparation. Much like competitive sports, the game of life is won on the practice field of preparation.
If your dreams include homeownership in Colorado, and especially in Olympic City USA, then ample, advance preparation is essential. Competition among home buyers in Colorado Springs is indeed fierce with historically low inventory amidst heightened demand as our city leads the nation as the #1 most desirable place to live.
So, how can you best prepare to win your Colorado dream home?
My answer: Get pre-approved for a mortgage before you begin your home buying journey.
Why is pre-approval such an important element of your game plan for success? Three reasons stand out.
Before you begin your home search, and certainly before you find and fall in love with your dream home, you need to know and fully understand your financial capacity (and limits). Effective preparation means knowing – before you shop – what you can afford, likely monthly mortgage payment, other loan and closing costs, down payment requirements, current interest rates and your personal comfort level with debt.
Investing the time and effort upfront to learn what you can afford and what buying a home will require in terms of cash out of pocket will serve you very well as you focus your home search and compete in a tight housing market. This advance preparation will focus and conserve your energy, demonstrate to sellers you are a serious, informed and well-prepared buyer and pay enormous dividends for you at the negotiating table. The result: your offer will be more seriously entertained, especially in the likely event of multiple offers, thereby increasing your prospects for success.
Gain a Competitive Advantage
In our low inventory – high demand environment, you need a competitive advantage to create the most compelling case for your offer. A strong pre-approval letter demonstrating that you are ready for final underwriting review is one of the single best ways to stand out from your competition. Sellers will know you are serious and appreciate that your financing is secure hence reducing opportunities for the deal to fall through.
Get There First
Investing the time to get pre-approved before you shop and submit a contract allows you to accelerate the homebuying – and closing – process. In short, you demonstrate to sellers you are able to cross the finish line with them first. You want sellers to see that you are best positioned to help them achieve their goals – a winning contract that moves quickly and smoothly to the closing table. Buyers who understand that sellers are primarily interested in highest and best price with a timely and easy closing will rise above the competition. Show sellers you can get them to the finish line first and you’ll be well on your way to unlocking the door of your Colorado dream home.
Get Pre-Approved, not Pre-Qualified
I also want to underscore that pre-approval is more than pre-qualification. The difference matters. Pre-qualification letters carry little (no) weight with sellers in a highly competitive, fast-moving market.
Pre-approval requires additional advance preparation. It means you have submitted the requisite paperwork – recent pay stubs, bank statements, two years of tax returns, a credit check, etc. – for a lender to review and affirm, in writing, that you are pre-approved to borrow a certain amount of money based upon proven and consistent income and assets over time, credit and debt levels, and credit worthiness. Ultimately, once under contract this paperwork will immediately need submitted for final loan approval, so go ahead and take the proactive step to submit it before you begin your home search.
Sellers love to hear from a buyer’s lender that she or he already has all documentation to underwriting for final loan approval. Go ahead and get this “bird in hand” early to strengthen the prospects of having your purchase offer rise above the rest. You’ll be glad you did!
If you’re not sure how to move forward with the mortgage pre-approval process, or you would like a lender referral, please call or email me today. I work with Colorado Springs-based lenders who are strongly customer service oriented, community-minded and offer the lowest interest rates and lender fees in the marketplace. They also have a great track record for on-time, smooth closings. Above all, they are deeply committed to educating clients about the mortgage approval and lending process, ensuring that you are well-informed, financially knowledgeable, and well-prepared to achieve your homeownership dreams.
I look forward to helping you prepare well to stand out from among the competition to win your Colorado dream home.