Why Get Pre-Approved?
1. A great place to start a home search is with a conversation with a good local loan person to find out what your loan options are, what these loans will cost you, and how much large a loan you can qualify for. Often you can start by verbally providing the loan person with information about your credit, income, assets and debts, and they can tell you what price range you can afford to be shopping in.
2. The next step is to complete a loan application and provide the documentation the lender will need to pre-approve you for a loan. These days most sellers will NOT consider an offer without at least a pre-approval letter, so if you are serious about buying this is a critical step towards getting you in your new home.
3. Why do you need a local loan person? Because not all pre-approval letters are created equally, and the particular bank or mortgage broker that wrote your pre-approval letter could affect your chances of having your offer accepted. Sellers want not only to obtain as high a price as possible for their home; they also want and need the transaction to close. Therefore, they want to be sure that potential buyers who need to get a loan are really able to get the financing. A pre-approval letter from a reputable local lender or broker is a known quantity: the seller (and/or the listing agent) is more likely to have confidence that the lender should really be able to follow through and provide the financing indicated in the pre-approval letter. Therefore, there is one less thing to worry about in the transaction, and that buyer's offer looks more attractive. Bottom line: Having the right pre-approval letter can make the difference between having your offer accepted, and having to go back to the drawing board!
If you're looking for suggestions for great local loan people, feel free to get in touch. I know some great ones!