It’s easy to get caught up in the exciting and fun part of a new home search – the actual search. One step you can’t forget to take care of up front is obtaining preapproval from a reputable, local lender. There are a few reasons why it needs done before you start touring homes.
Know Your Budget
There are some great online calculators out there to get an idea of how much house/down payment/monthly payment you can afford. That said, nothing replaces having direct, personalized feedback from a local lender. There are programs available for down payment assistance that frequently undergo changes or meet caps – only a lender will have the latest info on those. Having a little time to digest what they provide you with will ensure you are comfortable and confident with your house buying budget going forward.
It is best to know sooner rather than later if you have errors on your credit report or an identity theft issue that needs resolved. Those things can take time to fix and having a lender run your credit report early will spot an issues that might negatively impact your ability to obtain a loan at the best interest rate possible.
Make a Stronger Offer
Our market tends to be fairly competitive. It isn’t unusual to see multiple offers on a home particularly with in demand neighborhoods and great school districts. As the buyer, being able to provide a preapproval lender from your lender with your initial offer makes your offer stronger and more likely to receive serious consideration from the seller.
No Extra Work
All of the information you provide to a lender for your preapproval is the same information you will need to provide when you apply for the mortgage. Having a preapproval in place means you can return to the same lender and not need to resubmit the information. This is good news when you are already busy gathering and scheduling things for a home inspection and settlement.
As always, consult your real estate agent for referrals to a reputable lender.