Often, willing buyers are denied a chance to view a home on sale since they undervalued the importance of getting a mortgage pre-approval. That said, never take it personally if an agent declines to recognize you as a potential buyer on the condition you’ve not been pre-approved. Well, you may be a serious buyer but fail to portray the ability to pay for the house.
A mortgage pre-approval is a written declaration by a lender. It confirms your eligibility for a mortgage of a specific amount and their willingness to loan you the money. Various factors will determine mortgage pre-approval. These are your assets and employment, the suitability of application documents, income along with your credit history. Do you know why you should process pre-approval before you start house hunting? Take a close study of the reasons discussed below, and you will prioritize to have this requirement.
A Pre-Approval Has More Influence over a Pre-Qualification
Between a pre-qualification and pre-approval, which is more beneficial? Well, a pre-approval is more influential when hunting a home. You must not confuse the two. While a pre-qualification gives an estimation of how much you can manage to raise toward the house purchase, a pre-approval ascertains your capability to close the deal.
The written assurance (pre-approval) obtained from your potential lender is an approval they will lend you a specific amount of cash within a specified time. It can be a month, two months, or three months. Sure, this confirms the influence of a mortgage pre-approval and the value it holds when it comes to shopping for an ideal home with an intention to purchase.
Gives you an Upper Hand to Winning a Great Deal
There are times when a seller will have multiple offers. That necessitates them to weigh the various deals and settle on one that is more promising. Having a mortgage pre-approval will give you credit over other buyers. Note, pre-approvals are an assurance that the buyer is able to buy the house on offer.
Helps Establish your Creditworthiness
You will hardly know your borrowing power until you get approved. It helps identify the type of houses that match your financial muscles. The information aids in narrowing down your options, and you get to focus your purchasing more realistically.
Not to mention, it improves the efficiency of your hunting process. Besides, it protects you from the disappointment of falling for a house that is far costlier than your budget. Get your ducts on the trot at the earliest, and you will be a prepared home buyer.
Makes You an Influential Buyer
When backed by a written assurance from the financier will you are considered a serious buyer. That is why realty agents, as well as home sellers, will give priority to mortgage buyers. The pre-approval is evidence that your financial background has undergone through the scrutiny of the lender. It also indicates the amount you qualify for as a home mortgage.
It Boosts Your Negotiation Power
Getting a pre-approval is a plus to your home hunting. Do you know why? Pre-approved buyers have higher bargaining power as opposed to those who have overlooked the value of this step. If you want to influence the seller to give you a better deal, then hunt your house after getting a pre-approval. Sellers will likely accept a lessened offer from a buyer whom they are guaranteed as financially able to buy their home. Any seller will be sure you mean business when you walk to them with a pre-approval letter and will be willing to engage in a successful deal.
It Influences More Real Estate Agents to Work with You
Ideally, everyone wants an assurance that their hard work will likely bear fruitful results. So, getting a pre-approval motivates a real estate agent to show you the homes they have for sale. That way, they hope you may find one that interests you and may decide to close the deal. Without pre-approval, no agent will be willing to take chances. Get-approved and enjoy plenty of offers from sellers and agents.
Helps Accelerate Home Buying Process
When you are processing a pre-approval, it becomes easier for the seller or agent to consider doing business with you. That way, they can start the paperwork awaiting the funds. Note, pre-approval contains your financial details, and your lender has the information in their system. Thus, it does not take long to close the process, upon agreement with your seller.
Saves A Lot of Time
The process of acquiring a mortgage is long and tiring. However, you can shorten it by getting approval in advance. That way, you will be set to progress with your final mortgage processing after identifying a house that suits you and ready to buy.
Unfortunately, some homebuyers start shopping for a house before getting pre-approved. Avoid the embarrassment of not being shown a house. The above reasons should convince you to get a pre-approval before house hunting.