Keep The Horse in Front of the Cart!

While many purchasers are aware that a mortgage pre-approval letter increases their buying confidence and power, most may not understand exactly why pre-approval is so important. Why should you jump through the application hoops before even beginning your Bahamas real estate search?

First, you'll know approximately how much loan you can afford, making your initial Bahamas real estate search much easier. Why waste your time looking at homes either out of your reach or well below your financial grasp?

Second, pre-approved purchasers stand on solid negotiating ground with vendors. Bahamas Real Estate Association agents working with well-qualified purchasers have a much easier road to getting offers accepted and there will be less stalling on terms and conditions.

Notice that the topic of this column is "pre-approval," and not "pre-qualification." What's the difference? Pre-qualification is easy - you provide basic information to a lender, and fairly soon, you have an answer. Pre-approval requires strict verification of documentation relating to your employment, credit history, sources of income, etc. This takes more time, but is more accurate and carries more weight.

Understand that pre-approval is not binding, and is still subject to a satisfactory real estate appraisal and other documentation on the prospective purchase. If your financial situation changes, interest rates rise or fall, or the deadline passes, a recalculation will be necessary; but a little legwork now will pay off handsomely as you approach the finish line on your Bahamas real estate purchase.