The Importance of Getting a Pre-Approved Loan before Searching for a House

When you’re searching for a house, a realtor may ask whether you’ve been pre-approved for a mortgage. This means you have filled out a loan application and been approved for a certain amount of money from a lender. A pre-approval can be important when you are searching for a home, for the following reasons:

It Shows You Are Ready to Buy

When you show the lender’s pre-approval letter to a realtor, they can see you are ready to buy a house and are not just looking. It can be frustrating for you to find a Riverside, CA home for sale you really like only to not be approved for it once you fill out the loan application. However, if you have been pre-approved for a loan, you know you can buy a house you really like once you’ve found it.

It Determines Price Range

When you are pre-approved for a mortgage, you know how much the lender will let you borrow, so you can look for houses in that price range. Instead of being disappointed when you are not approved for a loan on a house you liked because it is too expensive, you can look for a house you love for an amount for which you are approved. It will make it easier on the realtor as well because they can find you homes within that price range instead of those you cannot afford.

It Gives You Leverage

Being pre-approved for a home loan can help give you leverage with the seller because they know you are ready to buy a house. If he has multiple offers on his home, you will be at the head of the list because you already have been pre-approved for a loan. With the pre-approval, you may be able to negotiate a better price on the Riverside, CA home for sale because the seller knows you have a loan already and it is just a matter of finalizing the deal.

It Shortens Buying Process

When you have a loan pre-approval in hand, you will spend less time looking for a house to buy. You won’t be looking for houses you cannot afford because the realtor already knows your price range, so they can show you the best they have in that range. In addition, it takes stress off of you, because you know if you find something you like, you will be able to buy it.

It Allows Time to Resolve Problems

If you do not like the amount you are pre-approved for, you can look at your credit to find the problems holding you back from buying a home in the price range you want. Then, you can take the time to resolve those issues to improve your credit score before buying a house. This can help you buy a house in the price range you want rather than settling for another house.

Getting a pre-approved loan before searching for a house will make it easier for you and your realtor to find your new home.

My name is Sohel Ather, software engineer by profession and a content writer by passion, Technical writings, blogging etc are stuff that I do as hobby.