A pre-approval for a loan from the right lender is simple to get, free, and leaves you with no obligation. Most importantly it is a valuable tool in today’s home searches. You may be hesitant to get pre-approval for a loan but there are many good reasons to look for your new home with one in hand.
The most important reason is that few home sellers will accept an offer without one. If you are fortunate enough to have a lot of cash sitting around then you do not need one. For the rest of us it is an important part of any offer. No seller in their right mind will pull their home of the market in the hope that you will be able to come up with the money to pay later. It is also a signal for the seller that you are a serious home buyer and it should get your offer, even if not accepted, a more serious counteroffer.
A pre-approval will check your loan application for problems. If there is a problem the earlier you find out the sooner it can be corrected. Additionally, consider that changes to a credit history take time. If you find the home of your dreams and then go to get a loan you may not have time to pay that delinquent bill you did not know about.
A good loan officer can help you set a budget limit and provide you with a good idea of what your payments will be. Matt Tierney atGuaranteed Rate says “A pre-approval from a reputable loan officer allows the buyer to have the peace of mind that they can know their approximate payment and down payment as they look at different homes”
A pre-approval allows you to put together an offer quickly. In fast moving markets like the West Loop in Chicago, homes can sell the first day on the market. If you have to wait to put together your offer and get financing someone else can step in and buy the home.
Buying a house or condo is a big decision. The agents at City Point Realty will walk you through the whole process and make your life easier, but it can still be stressful and time consuming. A loan pre-approval, if done before you find a home to buy, relieves your stress by allowing you to check off one very important thing on your to-do list.
It is important to shop around for the best mortgage company for your needs. Getting a pre-approval from a lender should not mean you have to get your loan from them. It is important to remember that any time you have your credit checked it can lower your score a few points. If you are still not sure sit down with a mortgage broker and they can help you decided what is right for you.