It’s no surprise, buying a home is a major investment. An investment that a lot of homebuyers likely are not paying in full upfront. Like many first-time homebuyers, you are probably wondering, what is a preapproval? A preapproval is a statement from a lender that states the amount you are qualified to borrow. Getting preapproved allows you to set budgetary limits and ensure that the homes you are considering are ones you can afford.
Why Is Getting a Preapproval Important?
While getting preapproved may add more to your to-do list when searching for a home, it will make the process less stressful for you down the road. With a preapproval, you can:
Getting preapproved allows you to finalize your mortgage faster after finding the place you want to call home. You are able to take care of most of the paperwork beforehand so you have one less task to worry about at the end.
Know Your Budget
When you get preapproved for a mortgage, you are able to narrow down your search of potential homes. With your given price range, you are able to find houses that meet your needs and wants while being affordable.
Plan Out Your Expenses
By knowing your budget, you can work on getting a general idea of the additional costs that will come with your new home. It is important to include this information into your budget so you don’t risk going over it. By keeping track of all of your expenses, you can relax knowing that you can afford it all.
Fix Credit Issues
When looking at getting preapproved, you may see some errors in your credit report. Use this time to fix those mistakes so that you have no problem getting the mortgage loan you want. This saves you both time and any hassle.
When Should I Get Preapproved for a Mortgage?
The best time to get preapproved is before you begin searching for a potential home. However, the timing of when you get your preapproved loan is crucial. You only have a certain amount of time to accept the loan for your house, and you don’t want it to expire before you finish your search.
Should I Get Preapproved Before Searching for Home?
Yes, you should definitely look into getting preapproved before looking into homes. But what are the benefits of it? Let’s look at some of the pros to getting preapproved before you look into potential homes:
- Your offer on the house is considered to be stronger if you are self-employed.
- Most times real estate agents will not work with you until you have been preapproved.
- If you are preapproved and submit an offer that is lower than the seller’s asking price, they have the option to accept your offer.
- When you have a preapproved loan, there is less of a chance that you will experience troubles when finalizing the mortgage.
- It lets both agents and sellers know that you are serious about investing in a home.
- It lets both agents and sellers know that your information was verified by your bank
There is quite a bit of information that is shared with sellers and agents when you are preapproved. It can be a very useful tool for you when it comes to finding a fair price or for submitting an offer for the house you want to call home.
If you’re getting ready to buy a home, be sure to get preapproved before. I can help you get preapproved and get you into your dream home. Contact me today with any questions you may have about the preapproval and home buying process.