“We’ll worry about that when we find a house.”
“Our credit is fine. It will work itself out.”
“I don’t want to give out my financial information, yet.”
Those, among others, are reasons we have heard from reluctant potential buyers for not getting a pre-approval. For those that don’t know… The biggest thing between you and your new home is not finding the right home, viewing the home, or even writing the offer. The biggest hurdle is (insert drumroll)…. getting a loan for the home. With that, here are the 5 reasons why pre-approval will put you in the driver’s seat to home ownership.
- Your agent will work harder for you. A pre-approval letter shows your potential agent that you are a qualified and aserious buyer. Take into consideration that agents are only paid when a transaction closes. Would you spend money on gas and take time away from serious clients if the buyer isn’t even willing to find out if they can purchase a home?
- You will know how much you can spend. Your lender will not only be able to give you a maximum amount that you can spend but will be able to show you estimated monthly payments at different price points. This information is invaluable when looking at homes in different price ranges and buying within your budget.
- You will save time and heartache. Knowing the monthly payment you would like, from your lenders numbers, will help narrow down your home search and speed up the buying process. More importantly, you won’t fall in love with a house you found online only to learn that you can’t afford it.
- Sellers will know you’re legit. When confronted with an offer sellers want to know one thing beyond how much money they will make. Can they actually buy my property? The pre-approval letter puts sellers and their agents at ease knowing that you the buyer have done your homework and are financially able to purchase the property.
- Your transaction will run smoother. Time frame contingencies are rampant in real estate contracts and transactions. Miss a deadline and you might just lose the property. Make sure your loan will be ready to be sent to underwriting by getting the proper document verification to the lender prior to writing your offer.
Remember, pre-approval is no longer an annomaly as most sellers (especially bank owned and short sale transactions) require written approval before accepting offers. Do yourself a favor and contact your local lender so you’re prepared to buy when you’re ready.
Feel free to contact me with questions or to view a list of lenders that my clients have enjoyed.