What are the advantages of getting pre-approval for a loan to buy a home and why is it so important to get pre-approved for a loan? Typically a first time home buyer will get the itch to buy a home.  Perhaps they’ve been considering and planning this for a long time.  They call a Realtor to go look at a home they’ve found on the internet and the first thing they ask is, “have you been pre-approved for a loan?”  Whoops! Roadblock! So, why is this step in the home buying process so important and what are the advantages?

Save Time by Looking at the Right Homes

If you’ve been searching for homes on the internet or you’ve been setup by your favorite Realtor to receive automatic e-mail listings of available homes, you can ask him/her to change your search criteria to match the selection of homes in the price range that you’ve been pre-approved for. This way you can save your time by checking out homes that you can actually afford to buy.

Focus Your Time Examining the Right Homes

By decreasing the inventory of homes to those that fit your criteria and price range, you can spend your time thinking about the little nuances each home has to offer. Instead of spending your time looking at homes that are out of your price range, you can focus on the details that matter to you in choosing a home.  Are the bedrooms large enough? Will my car fit in the garage?

Gain Negotiating Power

Now when you find that perfect home and you want to put an offer in to purchase, no one can take that away from you by saying you can’t qualify. When your Realtor presents the offer to the seller or the seller’s agent, they will also present your pre-approval letter from your lender. That is one more powerful advantage your offer may have over a competing offer.  You’re giving the seller peace of mind that if they accept your offer, this deal will more than likely close vs. falling apart because the buyer can’t get a loan.

Gain Confidence and Avoid Disappointment

Let’s face it, buying a home can be a very stressful process.  You can minimize your anxiety by getting pre-approved. You can have the confidence that when you find that perfect home, you will be able to qualify for the loan. You can sleep better a night, because there shouldn’t be any last minute surprises.

Enjoy a Faster Closing Period

Because you’ve already met with your lender and submitted all of your paperwork, the entire process can go a lot faster. The lender can order the appraisal right away. The lender will make your deal a priority because they’ve already completed most of the hard work. It’s possible to close the transaction in 2-3 weeks vs. the typical 30 days that it takes to close a transaction.

Typically obtaining loan approval is the longest contingency in your purchase contract. So, by getting pre-approved for your loan, your process will go a lot faster and smoother.

If you’re thinking about purchasing a home and would like to speak with one of the lenders that we work with, get in touch and we’ll hook you up with a reputable lender.