A vast majority of home buyers don’t understand the importance of mortgage preapproval when shopping for their dream home. In fact, shopping for your dream home without it is similar to shopping in a supermarket without your wallet. In today’s competitive real estate market, most home buyers tend to shop for their dream home as soon as they fill the mortgage application. They don’t wait until they receive a preapproval from the lender. This is a mistake that should be avoided if you don’t want to be disappointed over time. You will be wasting your valuable time in case the mortgage is disapproved due to whatever reason. This is why it is important that a serious buyer pursues a pre-qualification letter from the lender before shopping for his/her dream home. This article offers information on why getting your mortgage preapproval is crucial when shopping for your dream home on the market.
Most real estate professionals are astonished that they still get offers from clients without the preapproval from the lender. In fact, most real estate agents prefer to reject such offers since it involves a risk of wasting their time in case the mortgage is declined by the lender. The lender will offer your preapproval after verifying all the important details of your credit history.
These details include the credit score, tax returns, income, and bank statements of the client. Most real estate agents will call the lender directly to find out whether the client has the preapproval to shop for a home. This is why you need to get the preapproval letter from your lender before approaching a real estate agent to buy your dream home. Although a preapproval is not really a loan commitment, it helps speed up the loan approval process. Once you have the green light from the lender, it is very rare that the lender will disapprove your mortgage. Hence, a preapproval letter can save the time of both the real estate agent as well as the client.
In conclusion, the vast majority of home buyers do not obtain a preapproval when shopping for their dream home. Real estate agents will insist on obtaining a preapproval letter before shopping for your dream home. It can save you a lot of time.