If there’s one thing you should do before you start house shopping, it’s getting preapproval from a lender.
Preapproval is a conditional commitment from a lender. That means if you continue to meet the same conditions you meet when you apply, the lender will likely approve you for financing when the time comes.
Why Should You Get Preapproval Before House-Shopping?
A preapproval from a lender will help you with three key aspects of the home-buying process: knowing your price range, competing with other buyers, and expediting the buying process.
If you’re not sure which lender might be right for you, or whether you should apply for home financing as a couple or fly solo, talk to your Realtor®. We’ll be able to point you in the right direction.
Preapproval Lets You Shop in the Right Price Range
While you may have an idea about how much house you can afford, lenders consider a number of factors that most people don’t. A lender’s preapproval will provide you with a specific price range.
Your preapproval will help you determine how much money you’ll need for a down payment and what your monthly payments may look like. Further, lenders offer several types of mortgages. You may find that one type of home loan suits you better than others do.
A Preapproval Shows Sellers You’re Serious
The real estate market moves quickly. Many homeowners receive multiple offers, and it’s safe to say that sellers are likely to consider buyers who have been preapproved before those who haven’t. If you don’t have a preapproval, you could be sending sellers a signal that you’re not prepared to buy.
In some cases, this document can even get you a better price or more advantageous terms, such as cash at closing or a home warranty. Many sellers may be willing to forego a higher price in order to ensure a smooth transaction (and to prevent a deal from falling through due to financing problems).
A Lender’s Preapproval Can Speed Up the Process
Financial institutions can take several weeks to underwrite and approve your loan. Because the mortgage lender has already reviewed your financial information, preapproval puts you on the fast track to final loan approval.
A word of caution: prequalified and preapproval aren’t the same thing. Prequalification doesn’t include an in-depth examination of your financials, nor does it carry the weight of a preapproval.
Already Have a Preapproval?
Even if a lender hasn’t preapproved you for a loan, let’s talk about Middle Tennessee real estate. Call me at 615-473-5973 or contact Mallard Property online and tell me what type of home you’re looking for – I’d love to help you find it.
