Why is it Important to Get Preapproved Before You Shop for Homes?
Imagine finding your dream home, making an offer, and then losing out because you weren’t preapproved for a mortgage and someone else was. Getting preapproved is a critical step in the home buying process for several key reasons.
Know your budget
When you get preapproved for a loan, your lender will preapprove a mortgage amount for you. This helps you and your real estate agent identify homes that are within budget. You don’t want to fall in love with a house that’s way out of your price range!
Stand out in a competitive market
In today’s real estate market, it’s important to be as prepared as possible to make an offer. Sellers will take an offer more seriously if you’ve been preapproved since it shows you have already put work into the process of purchasing a house.
Build a relationship with your lender
Getting preapproved for a loan requires you to submit some initial paperwork to your lender. That’s just the start of the great teamwork between you and your loan officer. Your loan officer will help you navigate your current home purchase, but they can also help you down the line with refinancing, home equity loans, and much more.
Better understand the cost of a mortgage
Going through the preapproval process will help you have a better grasp on what costs you’ll incur when you get a mortgage. Educating yourself beforehand ensures you won’t be surprised by anything at closing.