Why Get Pre-Approved for a loan?
Too often, I have had a client find the perfect home, and then scramble to get their financial info to a lender in time for a loan pre-approval. Get your pre-approval letter early in your home search process. This is why:
1. You are prepared to write an offer when the time comes. Along with the purchase contract, proof of funds and signed disclosures, sellers expect a pre-approval letter with the offer to verify the buyer is qualified.
2. You know how much you can afford. I tell people to ask the lender what the max purchase price they would qualify for, and then ask at what price you can purchase to keep your monthly payments at an amount you are comfortable with. They may not be the same.
3. You can have pre-approvals at different prices. You may not want to reveal to a seller the max that you are qualified for, so they can leverage that to increase the sales price. This is something I strategize with the lender to decide the best approach.