Loan preapproval is an essential first before shopping for a home, if financing is needed. Once a lender issues a preapproval letter, it means the buyer can:
- Buyers save their time and the agent's time by only looking at homes they can afford.
- The home buyer gains confidence. Being preapproved, gives buyers the advantage of knowing that they can qualify to purchase the home.
- Sellers will be more likely to accept an offer from a buyer who is already preapproved.
- Closings happen faster. Since the bank already has the majority of the information from the buyer, the time frame for closing is lessened.
Mortgage approval is usually the longest contingency to satisfy in a purchase contract. It is to the buyer's advantage to get preapproved as soon as they are ready to being their search.