shopping house home loan

First Time Home Buyer

Why Get Pre-Approved for a Home Loan Before You Start Shopping?

Getting pre-approved for a home loan increases your chances of buying your dream home. How? 

Well, pre-approved loans assure sellers that you can obtain the necessary funds to purchase their property, so selling to you would be a sure-fire deal. It lets them know that you won’t back out last minute because of financial issues. 

So, even though it takes some effort and time to get pre-approved for a home loan, it is very much worth it. Let’s discuss why you should consider getting pre-approved before you start visiting properties and checking out open houses.

3 Reasons to Get Pre-Approved for a Home Loan

Getting a pre-approval letter makes the process of buying a home much smoother. Here are three reasons why:

1. There’s a Greater Chance That Your Offer Will Be Accepted

If you find your dream home, you will probably want to do everything in your power to get the seller to accept your offer. This entails being a ‘well-qualified’ buyer who can get the loan easily and make the payments on time.  

Sellers are unlikely to entertain offers if you can’t prove that you can afford their property. Therefore, getting pre-approved for a home loan may come in hand. 

Some sellers specifically ask to see the pre-approval letter before they seal the deal. So, having one handy would greatly improve your chances of getting picked over other hopeful buyers.  

2. You Will Have a Better Idea of Your Loan Cost 

When you get pre-approved for a home loan, the lender usually lets you know the interest rate that you qualify for. 

Depending on certain factors, you might have the ability to lock the rate, thus ensuring you know the exact home loan cost. Knowing beforehand how much you need to pay can allow you to plan accordingly. 

A pre-approval will help you decide what loan amount suits your budget. You can then assess the total mortgage cost and know how much you will have to pay over time.

3. You Will Have a Better Idea of Your Price Range

When getting pre-approved for a home loan, the lender will let you know how much you can borrow. Of course, most people don’t want to utilize their total budget to buy a home. But it can be helpful to know the upper limit.

This way, you won’t have to waste time determining if the home you are interested in is within your budget. Also, then you can choose a house according to what you can afford.  

In Conclusion: Pre-Approval Is Always a Good Idea

Though it may seem like a hassle to get pre-approved for a home loan, the reasons discussed here are worth it. Buying a home is already an overwhelming process with important decisions to be made, so making it easier in any way is always a good idea.

Schedule an Appointment 

If you want to get pre-approved for a home loan, contact one of our loan officers and get started with the process right away.