The Importance of Pre-approval When Buying a Home

It’s Spring 2022 and getting pre-approved for a mortgage is more important than ever in today’s low inventory market. The homes newly coming to market are closing quickly due to an unbalanced buyer to seller ratio. Once their house is listed, sellers are receiving multiple offers immediately. As a buyer, getting a verified mortgage pre-approval will give you a head start in finding your dream home.

First, it lets you know how much you can afford. Without a pre-approval you don’t know what price point you are qualified to buy. You could spend time looking at homes that may be over what you will be approved for, or you may be able to look in a higher range than you initially thought. Knowing your budget before you begin your home search can save you time by immediately narrowing the market of houses that you are qualified to afford.

Once you find a house that you would like to extend an offer on, your pre-approval lets the listing agent know that you’re serious and you’re ready. The listing agent has to verify every buyer that submits an offer and with houses being sold so quickly in the current market, there’s a good chance that without a pre-approval your offer won’t be seriously looked at.

Working with your agent and your loan officer, your pre-approval will provide you with the most accurate information for what you can potentially write an offer for. It also lets your agent know if you need concessions, what negotiation strategies they have available to help you secure your dream home, and if the kind of mortgage that you are qualified for matches what the sellers are willing to accept. Picking a good lender is key in getting approved for the right amount that you can afford. If you don’t have a preferred loan officer, a good agent can help you find the right one. They will let you know what documents and assets you need to have to begin the pre-approval process. Once approved, your loan officer will be prepared to discuss your strengths as a buyer with the listing agent, and the journey of finding your perfect home will begin.