A lot of people looking for real estate to buy do not know the importance of getting pre-approved for a loan BEFORE they begin looking for a property. Here are a few things to consider:
- You could lose out on a home you love. Especially when it is a seller’s market–like it is currently–you could lose a home you really liked because you did not have your pre-approval letter while someone else had theirs.
- It adds leverage to your offer. When submitted the pre-approval letter with your offer right off of the bat, they see that you are serious about your offer and that you are good for the money you are offering. Put yourself in the sellers’ shoes–would you want to accept an offer that you weren’t certain they could really give you?
- It shows what price range you are comfortable with financially. If you are out searching for homes and you do not know your price range that is determined by a lender, you are truly doing yourself a disservice. You not only would be wasting your time if you were in the wrong range, but you could be seeing homes that are totally above your price point. In this case, once you begin seeing homes you can afford you will only be able to compare it to the nicer homes you saw at a higher price point, which can make it quite difficult to find something you’re happy with.
So, just do the research or ask your REALTOR® for recommendations on lenders. Find one you are comfortable with. Ask for a pre-approval letter. Find a property!