If you are getting ready to buy a home, do not forget the critical introductory step of getting a home loan pre-approval. A pre-approval involves evaluating your financial information and credit ranking to identify whether you can be approved for a loan. It is not a guarantee for a mortgage, but a guess prior to a full mortgage application. Receiving a pre-approval letter is important for a variety of reasons. This article discusses reasons why buyers should have pre-approvals before visiting PA homes.
Know What You Can Afford
Lending requirements and interest rates will vary. A pre-approval will give you an understanding of the loans and options available, what your closing costs will be, and most importantly, your price restrictions. Without this, you will waste valuable time evaluating homes that are not affordable. Understanding your price range also prevents the heartbreak of falling in love with a home that you can not purchase.
Strengthening Your Leverage
Homes with highly sought after amenities or the most competitive prices usually move quickly. A pre-approval provides you with the power to make an offer on a hot property. When you write an offer, you normally must include a pre-approval letter. This tells the seller that you are prepared and able to buy. It is unusual that an owner will consider an offer and move forward with a buyer without any verification that a person can even get financing. In competing-offer situations, a pre-approval will make a significant difference.
How You Spend Your Time
A pre-approval saves time when preparing an offer and on the processing of a home loan. Many sellers require a pre-approval with offers. Failing to have one in-hand may lead to delays in completing your offer and can cause you to miss out on a listing. Pre-approvals involve reviewing income, assets, debts, etc. This may take several days depending on whether you have the documentation readily available. Mistakes in your credit reports may cause additional delays. Starting in advance will also save significant time in processing your mortgage and accomplishing a fast closing.
Reasons Why Buyers Should Have Pre-approvals Before Visiting PA Homes
The details above on reasons why buyers should have pre-approvals before visiting PA homes are something to remember if you are a future buyer. The real estate process can be complicated and stressful to begin with. Getting your ducks in a row will reduce the stress. For more advice, contact Pedro Teixeira at FIT Credit by emailing pteixeira.fit@gmail.com or calling 215.613.8130.