If you’re on the hunt for a new home, then you’ve likely heard the term “preapproval.” Many home buyers don’t get preapproved, and it’s a big mistake that can lead to heartache later in the home search.
A mortgage lender will look at your pay stubs, credit score, federal tax returns and more to determine how much they would be comfortable lending you. The preapproval is not a commitment on your part, but whenever you are ready to begin the loan process, a preapproval will help streamline the whole process and save you time.
If you’re serious about finding your perfect home, then start at a mortgage lender’s office before ever beginning your home search, whether your search be on real estate websites or at open houses.
Why should you get preapproved?
Know Where You Stand
Knowing how much you can get approved for by a lender is the clear first step to the home-buying process. If you begin searching for homes in certain neighborhoods that you find out later you won’t be able to afford, you may get your hopes up only to have them dashed, unfortunately.
On the other end of the spectrum, say you start your search in areas priced way below what you end up being able to fit into your budget. You could have been looking at higher priced or more updated houses all along! After getting preapproved, you may have to start your home search all over again.
Many real estate agents and sellers will actually reject offers from someone who doesn’t have a preapproval under his or her belt. Why? Well, think of it this way. A preapproval is like a public show to the world that you can back up what you’re offering. Why should an agent or seller just take your word that you have your finances in order?
They shouldn’t. Not requiring proof is not a smart move. If there’s no proof, then there’s no way for the other party to know for sure that you won’t back out of the purchase at the last minute, which causes a lot of grief on both sides.
It’s Easy with the Right Mortgage Lender
If the process is easy as one, two, three, then why not do it? At First Lenders, we walk you through each step of the preapproval process and make it as smooth as possible. We specialize in preapproval/ prequalification, mortgage lending of all types and much more. Please click here to contact us today!