Why Get Pre-Approved?

Having a pre-approval letter to accompany an offer helps give the buyer credibility. The power that comes with presenting pre-approval indicates to the seller that you are able and willing to purchase their home, immediately. Submitting that pre-approval upon partnering with an agent will considerably minimize your search time for a home because knowing what you can afford will only empower you and assist your agent in narrowing down your choices. The process will go more smoothly as you will know immediately that you are not previewing properties outside of your budget, thus granting you more freedom to enjoy the home purchase.

Keep in mind that there is a difference between being pre-qualified and pre-approved. Pre-qualification takes very little of the bank's time to tell you how much they think you can afford. At this early stage, you are providing details of your past and current credit history, employment, income, and any debts. The lender (the bank) will usually take this information at face value and pre-qualify you for a certain amount. It can take place very quickly, but the price is not necessarily set in stone at this point.

On the other hand, when you are seeking pre-approval, the lender will take a closer and more scrutinizing look at your credit history, and attempt the verify the facts you have given. A credit report will be ordered to showcase how you have handled credit in the past;

employment is usually verified, and bank accounts are also reviewed. If all the information seems to syncronize, then the bank will then pre-approve you for a certain amount. If, however, your credit is not as satisfactory as initially predicted, or your employment is difficult to confirm, as is often the case with those who are self-employed, the lender may either decline your loan, or approve you for a lesser amount than for what you were pre-qualified.

While being pre-qualified is important when you begin to look for a home, ideally you want to be fully pre-approved. Pre-approval means all that is left to do is sign the loan documents! This will give the best picture financially what you can afford in a home. This will save you from misleading yourselves while previewing homes outside of what you can afford and better prepare your agent for the homes you can afford.

When finding your dream home and preparing your offer, a seller will generally take your offer more seriously.

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Amy S Zender | Keller Williams | 3800 Byron Ave Ste 148, Bellingham, WA 98229 | Office: 866-738-7070 | Fax: 866-532-4862

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