Think Pre-Approval for Home Loans isn’t Necessary?
Stack the Deck in Your Favor by Getting a Pre-Approval For Home Loans BEFORE you go shopping!
Actually, you’re not even a buyer, you’re a looker.
3 Reasons You Need a Mortgage Pre-Approval
Here are three reasons why you need to get pre-approved before you go shopping for a home.
- You need to know what you can afford.
- You can make a strong offer to avoid missing out on the house you love.
- Smart Listing Agents will see your pre-approval-less offer as a weak one, and so will their Sellers.
Let’s talk about each one of those points.
How Much House Can You Afford?
What you think you can afford and what the lender thinks you can afford may be very different.
If you don’t know for sure what your maximum loan amount could be, you might be shopping for too much house. Why waste your time looking at houses – and falling in love with them – if you can’t buy them?
- Good lenders will get the information they need up front to process your pre-approval. If you fudge the numbers even just a little bit, you’re only hurting yourself because you must provide complete proof of your financial position before your loan will be approved.
Make Your Offer Stronger
Offers that are accompanied by strong pre-approval letters are stronger offers.
No one wants to tie up their property in a contract that might not close.
- Your pre-approval letter tells the sellers you are serious, and have taken the time to do the necessary paperwork to buy their home!
Weak Pre-Approvals Are Easily Recognized and Hurt Your Negotiating Position
Good Listing Agents recognize the on-line quickie approval places that really aren’t providing strong pre-approval support.
- If your offer has a weak pre-approval (pre-qualification) and another offer has a stronger one, the one with the stronger financing letter, even if it offers less money, might be more attractive to the sellers.
Real life story: buyers in a multi-offer situation I handled last year missed out on the call for “highest and best” offers because they hadn’t lined up their financing. My seller didn’t want to bother with them at all – he had other offers with stronger financing terms to choose from.
Don’t let that be you. Pre-approval for home loans will get you into your new home faster!
About Alison
