The Importance of Being Pre Approved for a Mortgage before looking for a Home

By
Real Estate Agent with Century 21 Alliance Realty Group

*From being in the business of Real Estate Sales it is very important to being Pre Approved.  So many buyers make the mistake and prefer to ask an agent to show them a house and not know if they can afforded the house.  Also they need documentation in writing showing they can afford to buy the house.  Some buyers will wait until after seeing the property and will return and find out the property has been sold.  One of the most important steps in the home-buying process is being pre-approved for a home loan. Many buyers apply for a loan and receive approval from a lender BEFORE searching for a home. This is called "pre-approval."

* Pre-approval can cut days or even weeks off the closing, because the lender has already conducted its credit analysis and approved you for a mortgage.

* Pre-approval strengthens your offer and negotiating position. A home seller will often choose to accept an offer from a buyer who is pre-approved for a mortgage over one whose financial picture is still in question.

* Pre-approval will determine your price range and narrow your search parameters. Based on your down payment and that pre-approved mortgage amount, you will know how much you can afford before you even start looking for a house.

There is also a significant difference between buyers who are merely "pre-qualified" and those who are pre-approved.

Pre-qualified buyers are those whose lenders have determined how much they can borrow based only on information the buyer has provided to the lender. Nothing has been verified to determine the buyer's true creditworthiness. The buyer still must fill out a loan application and go through the lender's approval process. It's also possible their credit score might not be what they think.

For buyers who have been pre-approved, the lender has already done a credit check along with verification of employment and deposit. The lender's pre-approval is a commitment to loan the buyer up to a certain predetermined amount. The only piece missing is the lender?s appraisal of the home to confirm its value.

Contact me when you are ready to purchase your next home. And let me know if I can provide any additional information about pre-approval or financing options.

If you would like to get on the right track towards pre-approval,  visit www.carteret/MNNT or call Minnie E. Thomas 845-564-7982

 

If you would like to get on the right track towards pre-approval, by getting quotes from lenders now, visit

Comments (4)

Brian Hoots
Real Living Speckman Realty, Inc. - Bourbonnais, IL

Minnie, Welcome to Active Rain!  Great info Thanks for sharing.

Feb 17, 2008 02:15 PM
Rick Callaham
Team Quintana Real Estate - Spokane, WA
Spokane Realtor
I wouldn't not talk to someone who wasn't approved like some say but it's very important and a good first start
Feb 17, 2008 02:49 PM
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hi Leonard & Minnie,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya both!

-Keith

Feb 17, 2008 04:49 PM