If you want to successfully become a homeowner, getting pre-approved is one of the best first steps you can take. But sometimes buyers, especially first-time homebuyers, think that getting pre-approved is just another random thing to do.
Getting pre-approved is anything but something random or optional.
In fact, it’s a key step to finding the right home for you in our current market. When you get pre-approved, a lender will take a look at your financial information and give you an estimate of a mortgage that you could get approved for.
A pre-approval basically says that with your current financial situation, you’ll be able to get approved for a home loan of a certain amount. Clearly, this is great information to have, but let’s go over 3 of the reasons why you should get pre-approved.
- It doesn’t cost you anything. Getting pre-approved is free, and you’re not locked into anything with a lender. In fact, you can go to multiple lenders (although I don’t recommend it – if this is the best approach for you, a broker may be the way to go!) and see what kind of deals on rates they can offer you without spending a thing!
- It allows you to plan for your future goals. You’ll be able to see how much of a mortgage you can afford when you get pre-approved. From there, you can take that information and use it to decide how much you want to spend on a house while keeping your future investments in mind.
- It educates you on your loan options. When you get pre-approved, your lender will show you several different loan options that may work for you. You can take that information and find out which loan is the right fit for your current situation.
Sellers also love to see buyers who are pre-approved.
They’ll know that you’re prepared to buy, which can make them more likely to work with you on negotiations.
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