The benefits of getting a pre-approval for homebuyers

You've probably heard that pre-approval is a crucial step in the buying process, and you might be wondering why. But why is it necessary? Is it still critical in today's shifting market?

When you are buying a home, one of the most important things you can do is get a pre-approval. This document shows sellers that you are serious about buying and gives you an idea of how much money you can afford to spend on a house. It also speeds up the process once you've found the right home because you have already been through the financial vetting process.

The truth is, getting a pre-approval letter from your lender is necessary, and it can be a game-changer in so many ways when it comes to looking for houses.

To better comprehend why, it's vital to understand what pre-approval is. According to Freddie Mac:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, . . .”

Simply put, pre-approval from a lender helps you to understand your true price range and the amount of money you can borrow for your mortgage. That can make house hunting easier. It will also be beneficial when it comes time to submit an offer on the home of your dreams since you'll know exactly what you're approved for.

Another advantage is that pre-approval tells the seller whether you're eligible to purchase their home. Paul Centopani, Editor for the Mortgage Reports, explains:

“. . . most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your preapproval teed up as soon as you’re serious about bidding on a home you like.”

In a market that's continuously shifting, every edge you can get as a buyer is vital. To navigate these waters, you'll need assistance, so it's critical to have a team of specialists on your side, such as a real estate advisor and reputable lender. They'll make sure you're fully prepared to put your best foot forward.

Bottom Line

Getting pre-approved for a mortgage may help you better understand your borrowing limits and demonstrate to sellers that you are serious about buying their property. Connect with The Perreault Group to obtain the resources you need to be successful as a homebuyer in today's shifting market.