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Why Pre-Approval Is a Game Changer for Homebuyers

By
Real Estate Broker/Owner with Arizona Resource Realty BR518926000

If you’re planning to buy a home this year, you might have heard that pre-approval is a necessary step to take before starting out on your journey. But why is that? And is it still important in today’s shifting market?

The truth is, getting a pre-approval letter from your lender is critical, and when it comes to your home search, it can be a game changer in so many ways.

To better understand why, it’s important to know what pre-approval is. Freddie Mac defines the process like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, . . .”

Put simply, pre-approval from a lender helps you understand your true price range and how much money you can borrow for your loan. That can make it easier when you set out to search for homes. And since you’ll know what you’re approved for, it’ll also help once it’s time to submit an offer on the home of your dreams.

Another added benefit is that pre-approval lets the seller know you’re qualified to buy their house. Paul Centopani, Editor for the Mortgage Reportsexplains:

“. . . most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your preapproval teed up as soon as you’re serious about bidding on a home you like.”

Every advantage you can gain as a buyer is crucial in a market that’s constantly changing. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals, such as a real estate advisor and trusted lender, on your side. They’ll help make sure you’re ready to put your best foot forward.

Bottom Line

Getting pre-approved for a mortgage helps you better understand what you can borrow and shows sellers you’re serious about purchasing their home. Let’s connect so you have the tools you need to succeed as a homebuyer in today’s shifting market.

Comments (6)

Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Jul 25, 2022 02:51 AM
Tamra Lee Ulmer

Thank you for reading, Richard. Have a great week ahead!

Jul 25, 2022 01:55 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Thanks for sharing Tamra!!! Great information!!!

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, . . .”

Jul 25, 2022 04:34 AM
Tamra Lee Ulmer

I'm glad you liked our post. Have a great week ahead, Sham!

Jul 25, 2022 01:56 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Tamra. Money is green. A seller wants to know you have enough to close the deal. Pre-approval says you have a participant to cover what you can't. Enjoy your day.

Jul 25, 2022 04:48 AM
Tamra Lee Ulmer

Agree on that, Wayne. Have a great week ahead!

Jul 25, 2022 01:59 PM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Preapproval has climbed the importance list to the very top.  I believe it will stay there for years to come.  M

Jul 25, 2022 10:21 AM
Tamra Lee Ulmer

I  must agree, thanks for your time. Have a great week ahead, Mark!

Jul 25, 2022 02:05 PM
Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

great reminder of the reasons why the pre-approval is so important

Jul 25, 2022 07:17 PM
Tamra Lee Ulmer

Indeed! Thanks for your time, Anna. Have a great week ahead!

Jul 26, 2022 02:04 PM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Thank you for sharing this vital and valuable information that every buyer should know about.

Jul 26, 2022 01:35 PM
Tamra Lee Ulmer

Thank you so much for appreciating our post. Have a good day! 

Jul 26, 2022 02:05 PM