Buyers sometimes get frustrated when they are asked by their Realtor if they have been pre-approved. They think "we just want to look at houses and we can get pre-approved later on". Hopefully, this article will help you to understand why getting a pre-approval is not only a necessary part of the home buying process, but it can also help you in your home search.
Top Reasons That Getting Pre-Approved is so Important
1. Getting pre-approved shows the seller that you are able to come up with financing in order to purchase the house. Most sellers will not take an offer from someone who isn't pre-approved seriously.
2. If you know how much money you are approved to borrow, it makes the home search easier for all parties involved. Why would anyone want to torture themselves looking at homes that are way out of their price range? You could also be approved for more money than you thought you might get, so now you can look at more expensive homes.
3. Don't just get a pre-qualification, get a pre-approval letter. When the bank gives you a prequalification letter, this is only an opinion based off of things that you have told them, whereas the pre-approval letter is a fact.
4. Even if you are just starting your home search and you know it may be a couple of months before you can make an offer, you should still get pre-approved. Pre-approvals usually stay good for up to six months. When the six months is up, then you just have to apply for another pre-approval. What if you start looking at homes and you find the perfect one, but you aren't pre-approved yet and the seller doesn't except the offer? Instead of having your offer accepted, you would have to go and get pre-approved first, and then someone else may have already purchased that house.
5. Getting pre-approved can actually help speed up your final mortgage approval.
6. Don't get overwhelmed by thinking about the pre-approval process. For most people the process is fairly simple, straight forward, and fast.
Getting pre-approved may seem like a daunting task, but it isn't really that hard to do. Most pre-approvals can be done within a very short period of time, some only take a couple of days. The best way to speed up the process is to have any documents that you may need to show the lender handy (such as check stubs and tax returns).
I hope you go and get pre-approved. Happy House Hunting!