I have been working with a lot of buyers lately and I am often asked why or if its important to be pre-approved. My answer is always the same and it is yes it is important to be pre approved. Throughout this article I will stress the main reason I feel it is important to be pre approved before looking at properties with your Realtor.
The first reason it is important to be pre approved is so you don’t waste time looking at homes you will not qualify. If you only qualify for $100,000 dollars it doesn’t do much good to start looking for homes that cost $150,000 because you wont be able to purchase them anyways. This seems like common sense to many of you but I have seen it way more then I want to.
Another reason to get pre approved is the sellers will take you more seriously. When you submit your offer to the seller you will also send in your pre approval letter stating that you are already pre approved. This tells the seller he has as serious offer with a buyer that is already pre approved for the loan amount.
Another reason it is important to be pre approved is during the pre approval process the lender may find minor items that need to be fixed. By being pre approved prior to writing an offer you have time to fix any glitches in your credit or debt to income ratio. This could be the difference between you losing your earnest money and not being able to purchase the home or you being able to fix any problems that arise and still being able to purchase.
Well there you have it. Always get pre approved before purchasing a home. If you have any real estate questions or questions about being pre approved please call me at 435-701-0448
I hope you will have a ton of readers. As a seller with an house in the upper range, I don’t even want to show my house to someone who is not pre- approved.
Link | June 27th, 2009 at 9:10 am
Well put. Many buyers don’t see the importance of gaining pre-approval, but it really can help make the whole process go far more smoothly.
Link | June 28th, 2009 at 9:07 pm
Good article and it is a very good idea to get pre-approved. But make sure the loan officer actually runs the buyer through an automated underwriting system and the information is acuurate. as the saying goes garbage in…garbage out!
Link | July 13th, 2009 at 10:17 am
Another reason to get pre-approved is the time it is taking to close on a loan. This includes additional time for appraisals thanks to the HVCC. Pretty soon it will also take longer as buyers will have a mandatory 7 day waiting period to review a good faith estimate thanks to the new disclosures coming out.
Link | July 20th, 2009 at 11:41 am
You are correct, it seems like common sence. As a realtor selling Homes in Baltimroe I can say that I have to explain the importance of being pre-approved on a weekly basis. Consumers generally feel that the mortgage qualification process is simple and fast. It is the LAST though most buyers have when they decide to shop for homes. If you have a 700+ credit score, strong reportable income and your debt-to-income ratios are in line you should be ok. However, how do you know until you get pre-qualified and identify what loan programs you qualify for in this ever changing market.
Link | July 21st, 2009 at 1:52 pm
I always tell clients that if they find a house and we end up in a multiple offer situation where the other offer has a letter and we don’t they will have to offer a few thousand above the other offer to win. So not having a letter can cost a significant amount of money
Link | July 28th, 2009 at 1:04 pm
Being pre-approved just means you’ve already jumped the 1st hurdle and are ready for the next one. You don’t have to jump over millions of 1st hurdles when you know you’ve already jumped that 2st hurdle. Less jumping to do.
Link | July 31st, 2009 at 2:00 pm
This is so true. I can not tell you how many times I have stressed to these issues to Baltimroe Home buyers in the past.
Link | July 31st, 2009 at 8:37 pm
I wont take anyone out unless they are preapproved. We dont look at homes till you talk to a lender.
Link | September 25th, 2009 at 6:52 pm