Unless you’re planning on buying a house with cash, you’re going to need to apply for a home loan to finance the purchase. For most buyers, searching for properties seems like the logical first step. After all, why would you want to apply for a loan before you know where you want to live? However, getting preapproved for a home loan before you start looking can be a great idea. Here’s how a loan preapproval can help you so you can decide if it’s worth applying now.
You’ll Know How Much You Can Afford
When you get pre-qualified for a loan, you only have a general idea of the type of house you can afford. However, when you get preapproved for a home loan, you’ll know exactly how much your lender is willing to offer you. This helps you better establish a budget and makes it easier to narrow down your home options.
It Holds Sway With Sellers
Sellers want to get rid of their properties as quickly as possible and with as little stress as possible. This means they want to work with buyers that are sure they’re able to pay for the house. If you’re preapproved for a home loan and another buyer that hasn’t gone through the process submits a similar offer, your offer will likely get chosen. That preapproval means your financing likely won’t fall through at the last minute.
You’ll Speed up the Closing Process
On average, it takes about 30 days to get approved for a loan. That’s 30 days sellers have to wait on buyers that haven’t initiated the application process. When you’re pre-approved for the loan, you won’t have to worry about lengthy application times with your lender. This means you’ll be able to close on the house more quickly. The sooner you close on the property, the sooner you can start turning it into your dream home!
Should You Get Pre-Approved?
Ultimately, the decision to get preapproved for a home loan is up to you. If you think your credit is strong and your finances are stable, do it. However, if you’re worried about your credit score, hold off until you can boost your score back up. This will help you qualify for a better loan. If you’re ready to apply for a home loan preapproval, don’t wait. Submit an application and get the ball rolling so you can start submitting winning offers.