January 04, 2011
Everyone has some specifics in mind for their new home. Maybe it's a bigger yard or no yard at all; maybe acreage in the country or the ability to walk to the grocery store. Now is the time to make a list of your "must-haves" and your top priorities.
Get Pre-Approved for a Loan
Check out our "Mortgage Basics" page for more detailed information about the types of loans available and information about your credit, as well as our "Homebuyers Dictionary" to familiarize yourself with some of the many terms you'll need to know.
Perhaps the most important step you will take as a homebuyer is to get approved for a home loan. But did you know that it's even better to get preapproved for a loan? When a lender hands you a preapproval letter, any potential seller is more likely to immediately accept your offer, even if it is less than the asking price, because the seller has the peace of mind that the home is really sold. It's just one step further in the process, that will go a long way toward assuring the seller of a smooth sales process.
In fact, everything does indeed go more quickly with a preapproval letter. You'll save time looking for the right home because your real estate agent can make the parameters of her search to fit homes that truly match what you are qualified to buy. Your agent can e-mail listings for you to look at and you'll know that you are only looking at homes you know with certainty you can buy. Lots of buyers never move past the price point, but you can devote your energies to making sure each potential home includes the "must haves" on your list like a two-car garage, a separate dining room or the right sized yard. You are less likely to be overwhelmed by all the homes you'll find and will be able to appreciate the nuances of the homes you do consider. In addition, you will have minimized the anxieties and last-minute surprises that could disqualify you and once you've made your choice and your offer has been accepted, appraisals can be ordered immediately and the loan processing procedure will be smoother and quicker. This can be a huge advantage if the seller needs to move quickly in order to relocate or needs the equity from the sale to put toward the new home they want to buy.
By getting a preapproval letter you will:
- Save time by looking only at homes you really can buy
- Spend more time considering each home's advantages and disadvantages
- Increase your bargaining and negotiating power
- Enjoy a faster closing period
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