Blog :: 01-2015

Why You Need to be Pre-Approved for a Mortgage. NOW.

In what's expected to be a very competitive Spring Market, Caroline Staudt spells out exactly why you should get a pre-approved for a mortgage NOW.

 

Many homebuyers start their home search by going to a real estate website, such as www.shanahanre.com, and searching in a specific town for homes with X bedrooms and Y baths. Then they look at the beautiful pictures, fall in love with their dream home online, and call a Realtor to show them the house. Some of these buyers may have a sense of what they can afford whereas others may not. 

While looking at pictures is more exciting than thinking about the numbers, this is a classic example of putting the cart before the horse. In this competitive market, unless you are buying a home with cash, you need to talk to a lender first and get pre-approved prior to starting your search.

What is a pre-approval?

When you speak to a lender to get pre-approved, the lender will request and review many of the documents that she will need in order to approve your loan - paystubs, W-2s for the last two years, two years of federal tax returns, two months of bank statements, and your credit report. With this information, she will determine the amount you will be able to borrow and will help you understand what this translates into in terms of monthly payments. She will then provide you with a letter that states that you have been pre-approved for a loan up to the stated amount - also known as a pre-approval letter.

Why do you need the pre-approval?

 

1. Help you understand what you can afford:

Prior to looking at homes, it is important for buyers to have a realistic understanding of what they can afford. For some buyers, the number may be a welcome surprise whereas for others, it might be a disappointment. In either case, it is essential to know what you can afford before falling in love with your dream home. When you and your Realtor understand what you can afford, you can limit your housing search accordingly and save yourself both time and potential heartache.

2. Give yourself time to improve your credit score:

If, in the process of getting pre-approved, you learn that your credit score is lower than you hoped or that there is an error in your credit report, lenders can often work with you to correct any mistakes and to improve your score. This could help increase the amount for which you are approved or reduce your interest rate.

3. Be ready to put in an offer:

Without a pre-approval, you cannot buy a house. Period. A seller will not review an offer from a non-cash buyer that does not include a pre-approval letter. You do not want to be in a position where you fall in love with a home that you might in fact be able to afford but not to be able to put an offer on it because you have not yet been pre-approved. It is better to be pre-approved prior to searching so that as soon as you find that house, you can make a strong offer. For some buyers this happens quicker than you may think!

 

If you are starting your home search and are now convinced that you should get pre-approved, we at Better Homes & Gardens Real Estate - The Shanahan Group can recommend trustworthy and reliable lenders who would be happy to speak with you and help you get pre-approved. Give us a call. Here comes the spring market! 

 

Low Housing Inventory Means a Great Time to Sell in Winchester!

It's a great time to sell! Better Homes and Gardens The Shanahan Group's Nic Gatto explains why.

 

Low Inventory = Great Time to get Top Dollar for your House

The Winchester real estate market had a very good year in 2014 with average home values rising 6.3% from their 2013 levels, according to Zillow.com. Interest rates remain at record lows, with the average rate for a 30-year fixed rate mortgage currently at 3.86%. Qualified buyers are currently waiting on the sidelines to swoop in and purchase, even over-pay for homes. Winchester’s top rated school system, along with its close proximity and easy commuter rail access to Boston, has potential buyers lining up.

Right now only twelve of twenty-eight total properties for sale in Winchester are priced under $1Million. You don’t have to be Alan Greenspan to understand the principals of supply and demand, it is a very simple concept.

When there are only a few homes for sale and many qualified buyers, prices will inevitably rise. This places homeowners in a great position to sell their homes for the most money possible. 

Historically, sellers have placed their properties on the market at the start of spring, as that is the time of year buyers begin looking for new homes. Low inventory has thrown conventional thinking out the window. The laws of supply and demand dictate that getting your home on the market now is your best bet to get top dollar. In the past six months, sixty-seven properties have sold under 1 million dollars in Winchester, over 46% of them sold over asking price - and over 67% had an accepted offer that resulted in a sale in less than 30 days! If you have been considering selling your home, don’t hesitate. Now may be the best time in years to get top dollar for your home.

According to a recent report on WCVB.com, 2015 will be the biggest year in home sales in ten years. They state many reasons - from continuing low interest rates to pent up buyer demand, and the strength of the overall economy. Another factor indicated is that home owners’ equity has increased nearly 20% in Massachusetts and New Hampshire since 2011. This provides a lot of flexibility to home owners.

The Redfin Research Center in late December 2014 stated that the percentage of buyers who feel now is a good time to purchase a home, is up 6% from only this past summer. Furthermore, those buyers surveyed identified some of the top home characteristics they are looking for. The top two being-36% chose short commutes and close proximity to amenities (such as coffee shops), and 21.2% stated a highly rated school district as most crucial to their move. Winchester offers buyers both of these characteristics, therefore illustrating why Winchester is such a hot market.

 

My family has been in the real estate business since the 1940’s in the greater Boston area. I represent the third generation of real estate experts helping people buy and sell real estate. I am well-acquainted with Winchester. I grew up in town, and currently live here with my wife and our three children.

As in most professions, teamwork is essential in providing the best service, which is why you should choose Better Homes and Gardens Real Estate The Shanahan Group. We bring the highest level of professionalism and service to our clients. We have helped people buy and sell property in Winchester with a collected value over $47 Million in 2014.

Call or email me today to get your home in the “just sold” category for 2015. 

Nic Gatto