Reasons To Get Pre-Approved For A Loan Before Buying A Home Or Condo PDF Print E-mail
Written by Lisa Udy   
Friday, 13 August 2010 20:58
When searching for property, the lender approval process can seem like a long process, especially the waiting. If you understand why get pre-approved for a loan before buying a home, your anxiety will remain low and the realtor's job will be a lot easier.
by LisaUdy


When searching for property, the lender approval process can seem like a long process, especially the waiting. If you understand why get pre-approved for a loan before buying a home, your anxiety will remain low and the realtor's job will be a lot easier.

Knowing how much home you qualify for ahead of time can help cut down on the number of home viewings. Depending on your price range, you may have many homes or just a handful. Regardless, it is easier to pick from a select group than jumping all over the place not knowing how much you will qualify for.

Getting pre-approved before you start searching can help you and your realtor. For one, you know what your budget is so you do not waste time looking at homes not within the budget. Two, potential sellers are more likely to accept lower offers for potential homeowners that are pre-approved. This is because they know if they accept the offer the loan has already been pre-approved and there is a good chance the sale will go through. Three, the realtor can narrow down the search for you, which means less work on their end and less running around on your end.

In order to get pre-approved, you must have all of the required documents requested by the lender. Tax returns, proof of employment, proof of debt, how much of a down payment you have. They will first check your credit and move on from there. Once employment stability is verified and tax returns are examined they will go to work pre-approving your mortgage loan application. This will be based on their algorithm and how much home they believe you can afford. The amount of your down payment will also play a role in this determination.

Getting a home loan from the lender makes life easier for everyone. You, the buyer know what you can afford up front, the seller can be assured that you have been qualified by the bank so they are not wasting their time, and the realtor can focus on homes within your price range and look more closely for amenities that you desire.

Another benefit is that sellers are eager to work with potential buyers who have been pre-approved. This acts as an insurance policy that you have met the preliminary requirements to buy their home so they may be willing to take less knowing that the deal will go through and they can move on their lives.

Speaking with multiple potential lenders may get you a better rate so do not be afraid to shop around for your mortgage loan. Taking the time to get the best rates now will save you a lot down the road. If you think about a 30 year traditional home loan, even a few dollars a month can add up.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Article written by Lisa Udy, who is an expert in her field. You can learn more by visiting Smithfield Utah Homes For Sale and Providence Utah Homes For Sale.