When it comes to buying a home, most people need to have a mortgage in place. Given the sums of money involved, the majority of buyers won’t pay by cash or bank transfer. There is a need to find financial assistance, and this is where a mortgage offer is useful.

However, there are no rules or regulations which prevents you from making an offer on a home without a mortgage offer. If you believe you’ll get a mortgage offer, but you haven’t done so yet, you may feel you can make an offer without harming your chances. Also, if you think you can fund the property purchase through other means, you don’t need a mortgage offer in place before you place a bid.

The nature of the offer influences vendors

Of course, the manner of your offer influences the vendors’ decision. The size of the proposal is critical, and vendors often accept the most extensive offer. However, there are many factors to consider, and savvy vendors take a lot of aspects into consideration before accepting an offer. This includes the nature of the offer, and it may be a mortgage offer provides the vendor with greater confidence about your ability to come through with the money.

If you are unsure if a vendor would act in this manner, place yourself in the position of the vendor. If you received two offers of the same value, you need to look for different features to differentiate between them. You may opt for the offer you received first, but the smart homeowner will consider the options, and choose the offer that is most likely to succeed.

Unless the buyer can provide proof they can give the sum of money required without a mortgage, vendors will be wary of this bid. Therefore, buyers need to consider making an offer in the way which makes the most significant impact, and a mortgage provides confidence to the buyer.

If you obtain pre-approval, you should do so

If you are in a position to obtain a pre-approval for a mortgage, you should do so. This qualification indicates a lender has examined your finances and believes you will be in a suitable position to obtain the loan and pay it off. The lender is waiting for the buyer to find a suitable property and then make an offer on it.

This provides confidence to the buyer that money is in place for the sale of the property, and that the buyer is committed to purchasing a property. If you make an offer without this backing, you may be committed to the process, but the vendor feels less confident about your commitment.

It is natural for buyers to speed up the sales process, and get in before rival buyers. However, it is worth waiting on obtaining pre-approval as this enhances your chances of success in the market. Just because you don’t need to have a mortgage in place to make an offer on a home doesn’t mean you should.

If you are looking for guidance in arranging a mortgage, contact Mortgage Simplicity, and we will be more than happy to assist you.

Your home may be repossessed if you do not keep up repayments on your mortgage