You're anxious to start looking for your dream home but how much can you afford to spend on a home? Beforeyou start expending yours and your real estate agent's time visit a lender and get a preapproval letter. You might be surprised at the advantages this simple letter can afford you.

• Save time by looking only at homes that you can afford,
• Grant yourself more time to look at all the features each home has to offer,
• Limit the anxiety and last-minute surprises that might disqualify you and dash your dreams of the perfect home,
• Increase your negotiating power by giving the seller the reassurance of a preapproval letter along with your offer,
• Enjoy a shorter closing period because the loan application has already been processed.

Be aware, there is a difference between the terms preapproved and prequalified. Preapproval indicates that a borrower's credit, references and employment have been verified. Prequalification is based on the opinion of a loan officer and implies a person is creditworthy but that nothing has yet been verified.

 © Copyright 2007 by Lynnette Phillips