Q. Why do realtors want me to be pre-qualified before they show me houses? I don’t want to go to a lender until I know what I want.
Real estate experts tell first-time home buyers that it’s critical to apply for a loan before shopping for a home, and it’s true; this is an essential first step. There are more advantages to gaining preapproval than you would initially surmise. When the lender hands a borrower a preapproval letter, it means the borrower can:
- Save time by looking at what you qualify to afford.
- Spend more time looking at the right homes by narrowing down the price-range. Some properties don’t qualify for certain types of financing and it is essential to know in advance to not waste time looking at the wrong properties.
- Avoid Disillusion by knowing you can afford that dream home you just saw instead of being disappointed when you find the perfect home and then are told you don’t qualify to buy it.
- Advantage is you are in a better position to negotiated.
- Another advantage is you will be able to close faster and move-in and your offer will move to the front of the line if you can accomplishes meeting the seller’s need to close fast.
Because mortgage approval is generally the longest contingency to satisfy in a purchase contract, it’s to your advantage to obtain a preapproval letter as soon as you’re ready to begin your search.
Besides how can you know what you want if you don’t know what you qualify to afford.