[flickr size="small" float="left"]http://www.flickr.com/photos/42659427@N02/3931945503/[/flickr] It is imperative that one speaks to a lender before beginning their housing search. This is true for a number of reasons, but mainly for knowing the actual costs associated with various purchase prices. Most people are mainly concerned with how much is the place going to cost them every month. A lender can look at your situation in less than 15 minutes, get you pre-approved for a specific amount, as well as discuss what the current interest rates are. This last point is the key point. Just a few tenths of a percentage point can significantly increase or decrease your monthly outlay. I have previously written on this topic that available financing is just as important as the purchase price.
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Also, you don’t want to look at million dollar homes, if you can only qualify and afford half a million dollars. Not only is this a waste of time for you, your realtor, the listing agent, etc, but once you see those homes, all of a sudden the half as nice homes aren’t going to be nice enough anymore. There is nothing wrong with admitting that you can only afford a certain level, as I am sure most people wish they had $20M plus homes, but for most (including me), this just isn’t an option, and so it is not even worth discussing. When searching for properties, one must be real about what they can and can’t do, and take it down from the hypothetical to reality.
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With that information in hand, one can then go out and find the best available home in or close to the area where they want to live. Once you find the home you like and are ready to make an offer, including a pre-approval letter with your offer will make it all that much stronger. It shows the seller that this person is serious, has done their due diligence, and if we accept, they are more likely to be able to close the deal. At the end of the day, closing the deal is what everybody involved in the transaction’s main concern is.