You found the perfect house, it’s everything you’ve been looking for and you’re ready to make an offer. But without a pre-approval, how do you know if you can afford the house? Even if you do qualify to purchase the house, a seller will want a pre-approval letter to go along with your offer. In this current sellers market, where there are multiple offers on each property, a pre-approval letter has become a necessity. This is important information to a seller since they do not want to accept an offer that is likely to fail because financing cannot be obtained.
Getting pre-approved is the first step in the home buying process. This will allow you to know what you can afford, which loan program is best for you, and will put you in a strong position to make an offer as soon as you find a property you like. By knowing your financial parameters, your real estate agent can really focus on finding you properties that are a better for your needs. Most real estate agents require you to be pre-approved before they spend their valuable time showing you homes. Agents see pre-approved buyers as more serious (and more valuable) because they’ve taken proactive steps before ever even getting in the car with them.
Based on how much funds you have available, you will have different loan programs available to you. By getting pre-approved, you can find a loan that will work best for your individual situation. Arming yourself with a pre-approval letter will also make you a strong candidate to the seller. It will put you in better negotiating position as the seller will know you are ready, willing and able to buy. With a pre-approval letter in hand, you will be able to remove some of the uncertainty in the home-buying process and your realtor will be ready to jump when the right property comes along.
Getting pre-approved means some upfront work on your part, but even if you think you are months away from buying a home, it’s worth the effort. Typically, the pre-approval process involves filling out a loan application, providing documentation to prove your income and assets and reviewing your goals with our team. If you find the perfect house right away, great! If you are just trying to get an idea of what you can qualify for, we will just need a few documents updated once you are ready to purchase at a later date. Once you find the home you are ready to offer on, we will quickly provide a tailored pre-approval letter with the property address, purchase price and specifics of your loan program and provide it to you and your realtor. When you have a pre-approval letter in hand, the home buying process will be less stressful and more enjoyable.
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