The Importance Of Mortgage Pre-Approval
Simply put, getting pre-approved basically means you're a serious buyer.
Below are a few reasons why being pre-approved before house hunting is important
What exactly is mortgage pre-approval?
A mortgage pre-approval is a letter from a lender letting you know how much of a loan you qualify for after looking through your financial history. It's important to note that pre-approval is not a loan commitment, but it's important because it does help speed up the loan approval process when the time comes for underwriting (after the house is put under contract.)
Why is this important? This is important because now you know what you're working with. Many times homebuyers spend days, weeks, and even months looking through websites like zillow, trulia etc searching for houses they're not sure they can afford. There is no problem with window shopping, but more often than not buyers will want a house they cannot afford. You need to know where you stand and shouldn't go in the home buying process blindly. Getting pre-approved avoids all heartaches and time searching for the wrong house.
In a competitive market, which is hot right now Buffalo, getting pre-approved will always work in your favor. If you do not have cash on hand for an all-cash purchase, the pre-approval will show the seller that you are serious. Homeowners/Seller want to know that you have some kind of financing lined up, and they'll want to see proof. In most cases, offers without pre-approval are rejected. You don't want to be on this boat.
All of this being said it is important to shop multiple lenders before you start your home search. Never go with just the first lender, since different lenders will have different requirements. This way you can compare the all in costs and get the best deal. Please note that in this situation credit is very important. Credit can easily affect something such as your down payment amount. This is why getting pre-approved is extremely important and highly recommended. If something negative in your financial history pops up.. It gives you time to fix those errors and improve your credit score.
I hope this gives you some clarity as to why you should get pre-approved. If you're considering buying a home in Buffalo and have any questions please feel free to contact me.