Unless you are paying cash for a home, you’ll need to borrow money. Don't make the mistake of running out and starting to view properties before you have taken the most important first step: solidifying how you will finance the purchase once you find that perfect home. This misstep can be detrimental to your home search and can quickly turn what should be a fun experience into a discouraging one. Although the preapproval process can be time consuming, it has to be done at some point. So, why not save yourself the headache later and get it done now. The benefits of taking care of this step FIRST far outweigh any reasons you may have not to.
Takes Time: It can take several days to secure a preapproval letter from a lender. Trying to scramble to get this done once you've found a home can be very stressful and may end up costing you the house.
Saves Time: Active home searching requires a good deal of your valuable time, energy, and consideration. If you don’t want to waste that, make sure your financing is secured so you can be confident that when you find “the house” you will have the means to purchase it. It’s better to know before you go!
Increases Buyer Marketability: If you find “the house” at a great price, chances are you may not be the only one looking at it. If the seller gets multiple offers (which happens frequently in our market when there is a good home at a good price), the seller will most likely choose an offer from a buyer who can show proof of secured financing. Having loan preapproval makes you more marketable as a buyer!
Required on Distressed Property: If you end up deciding on a home that is listed as a foreclosure or short sale, the bank requires a loan preapproval letter to accompany the offer. If you don’t have one ready, you will likely miss out on these properties.
Gives Peace of Mind: Having loan preapproval upfront gives you peace of mind. You know from the get-go how much you qualify for, what your interest rate will be, what your payments will be, how much you need to have saved for your down payment, and what price of home would fit into your monthly budget.
Make your home buying experience the best that it can be by starting the process off right and getting preapproved FIRST! You will definitely be glad you did. If you don't already have a lender you are working with and would like a recommendation, check out these providers!
Information courtesy of Intermountain Multiple Listing Service. Information provided by IMLS is deemed reliable but not guaranteed. IDX information is provided exclusively for consumers' personal, non‐commercial use, it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. IMLS does not assume any liability for missing or inaccurate data.