In recent years, an increasing number of buyers are finding out how much mortgage they can obtain before they begin their house hunting. This process is called pre-approval. It is becoming more of the norm for three solid reasons.
Buyers know what they can afford
There is nothing more frustrating than to look at homes in the $500,000 price range only to discover that you can afford no more than $400,000. If you are pre-approved, you can look at homes safe in knowledge that you are financially able to purchase any property in your price range that appeals to you. A pre-approval also allows you to learn of any credit problems you may have so they may be addressed before you commit yourself to a home purchase. There should be no cost for this process and with today’s technology, it can typically be done in less than a day, with many lenders within an hour!
Sellers know you are an able buyer
Until recently, most sellers were not absolutely sure a buyer would be able to meet the terms of a mutually agreed upon sales agreement. They would take their home off the market after negotiating with the buyers to see if they could obtain the necessary financing to complete the sale. With a pre-approved buyer, however, your Realtor® can present a legally binding loan commitment letter from a mortgage lender at the time the offer is presented to the seller.
Realtors can better serve your needs
Your Realtor® can advise you on the home choices that match your price range. They also can refer you to the lenders in your area who offer a pre-approval service. When presenting an offer on your behalf, a pre-approval equips them with another strong reason why a seller should agree to sell to you rather than any competing buyer who is not pre-approved.
Advice: When you decide to begin looking for your next home, ask your Realtor® for help in getting pre-approved.
