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Avoid Homebuying Stress with These Four Tips

Key takeaway

You may be able to reduce the stress of the homebuying process by securing your financing before you even start house hunting. In this article, you’ll learn more about the importance of early home financing, as well as the difference between prequalification and preapproval.

Learning Center overview

Buying a house is a process with several moving parts, which can be stressful. One way to reduce the stress associated with homebuying is to secure your home financing before you start house hunting.

Tip #1. Money rules.

Every decision about buying a house costs money, so money is a great place to start.

Every major decision you make during the process directly or indirectly impacts how much money you will need to spend to make an offer on a home, finance, and move into the home you buy.

Starting with a mortgage preapproval helps you to stick with a budget and make sure other choices related to the home purchase don’t take you over the amount you’ve been approved to borrow. Learn the difference between prequalification and preapproval.

Tip #2. Boost your money habits.

Knowing the financial habits that lead to your approval can help you maintain or even improve those habits.

Since your preapproval is conditional in that everything in your financial profile needs to remain the same, it also helps ensure your economic behavior while actively shopping for a home doesn’t include spending or other financial decisions that would make your preapproval null and void.

Tip #3. Avoid disappointment.

Knowing how much you can borrow helps you prioritize your home shopping focus.

This enables you and your real estate professional to narrow the focus to properties and neighborhoods you know you can afford.

This prevents you from falling in love with a neighborhood or house, only to later learn you can’t afford either.

There are various lending tools that help you learn how much you can afford to borrow. For example, Wells Fargo makes starting the process easy with our prequalification tool, which takes two to three minutes to check how much you could qualify to borrow without impacting your credit. If you don’t feel ready to submit a preapproval application, using a prequalification tool is another way to get a sense of how much you might be able to borrow based on the financial information you enter into the tool.

Get Prequalified

Tip #4. Compete instead of chase.

A preapproval gives you a competitive advantage and time to choose homeownership instead of chasing it.

Sellers need proof that you can pay their price – One advantage of having a preapproval letter is it shows sellers you have the financing you need to pay their asking prices or deliver on any offer increase to beat out other buyers. For most lenders, your preapproval is valid for up to 90 days, as there aren’t drastic changes to the financial information provided when you submitted your preapproval application.

Time to choose instead of chase – National Association REALTORS^® found that in 2021, it took most buyers two months to find the right house.

Securing your mortgage preapproval before you start shopping for a home gives you up to four months, which on average, is double the time you need to find the right house. This means you don’t have to rush your process even in markets where bidding wars are normal.

Whether you decide to use a prequalification tool or complete a preapproval application, a Wells Fargo Home Mortgage Consultant can help answer your questions about the process and explain home mortgage loan options based on your unique financial situation and goals.

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