Advantages of Starting Your Home Search Preapproved
Financing details are known before the home purchase.
You know how much you can spend and won’t waste time looking at homes you can’t afford.
You can act quickly to make an offer when you see a home that meets your needs and negotiate with confidence.
Preapproval could put you ahead of competing buyers who don’t yet have financing in place.
Shows the seller you are a prepared and serious buyer since you already spoke with a bank or financial institution.
Shows you are more likely to complete the transaction if preapproved.
Since you are preapproved, finalizing the loan can go much quicker.
It is important to understand as well that there is a difference between prequalified and preapproved. Simply put, a prequalification generally means that a mortgage lender collects some basic financial information from you to estimate how much house you can afford. A mortgage preapproval is a more official step that requires the lender to verify your financial information and credit history. Documents required for a preapproval may include items such as pay stubs, tax returns and even your Social Security card. This means a preapproval is a stronger sign of what you can afford and adds more credibility to your offer than a prequalification. This will also allow you to show sellers a preapproval letter to demonstrate that your financial information has been verified and you can afford a mortgage.
