Know the Difference!

How much home can you afford? How do you even begin to find the answer to that question? You've probably heard terms like "pre-approval" and "pre-qualification" tossed around, but do you understand the critical difference between those two? If your answer is "no," then please read on to avoid major disappointment when you make your offer.

“Pre-qualification” is a fine place to start, but if you're really serious about the time and money you're going to invest in purchasing a home, you'll really want to focus on “pre-approval.” Approval, and not just qualification, is secured when you complete and submit a loan application, along with the appropriate documentation and fees.

The lender will review your application and paperwork, and will notify you of just how much financing you can secure. Only then will you have the confidence to make your home choice and make your offer.

A pre-qualification, on the other hand, is more informal, and only an estimate of the funds for which you might qualify after applying for a loan. You might make an offer with pre-qualification in hand, but it's no guarantee that your loan application will be accepted.

The seller's representative will have educated the seller about this critical difference, so make them an offer they can't refuse! Pre-approval puts you in the driver's seat, so get ready to move!

Buy Now, Retire Later

Have you been hearing that it's a buyer's market? Take a look at local home prices. Have you been told that there's no time like the present to plan your retirement? Again, take a look at those prices, and then think about investing for your future.

When retirement nears, many of us consider making a move, either to a more desirable location or maybe into a smaller home. How do you think home prices now will compare to prices in the future? Buyer's market or not, you can bet that home values will rise.

Even if you're years from retirement, you could consider buying your retirement home right now. If you've built up substantial equity in your current home, you're in a great position for financing on that second home. Even if you can't afford to buy it outright, you'll certainly qualify for more attractive terms on the mortgage.

You see, if you're buying a second home as a residence, most lenders will offer you a lower interest rate than if you were buying another home simply as a real estate investment. Honestly, though, what better "investment" could you make than to purchase your dream retirement property now, while prices are certainly lower than they will be in five to ten years? Consult with a real estate agent and your financial advisor to learn more!