Loan Pre Approval – The Importance Of Planning Ahead

Loan Pre-Approval: The Importance of Planning Ahead

You’ve probably heard the saying, “If you fail to plan, then you plan to fail.” These days, this is especially true when it comes to “planning” for the home loan process. It is so important for homebuyers to get pre-approved, which gives them written documentation that they have the full support of a lender.

Sellers usually take an offer from a pre-approved buyer more seriously because they know that financing is in place and the deal is secure. Note that pre-approval is NOT the same as getting pre-qualified, which does not involve completion of a loan application that is reviewed by an underwriter.

Here are just some of the reasons homebuyers should get pre-approved…as early in the loan process as possible!

  • They’ll have time to correct errors on their credit report that could prevent them from receiving the lowest possible interest rate…or a loan at all.
  • They won’t look in the wrong price range for a home and be disappointed by what they can really afford, or surprised at what they could have afforded.
  • They’ll know the amount of money they’ll need long before closing.
  • Online calculators are notoriously inaccurate and set wrong expectations.

In today’s market, many sellers won’t allow showings to buyers who aren’t pre-approved. Think about it: Would you uproot your family for a buyer who isn’t a real prospect to buy your home? The loan process is the last place people want any surprises to come up. Planning ahead and getting pre-approved are two of the best ways to make sure the loan process goes smoothly.