Buying a home is a process. Part of the process is preparing to purchase a new home. The benefits of getting pre-approved as a buyer start by giving you, the buyer, a clear financial picture.
Find out what you can afford.
One of the biggest benefits of getting pre-approved as a buyer is that it eliminates doubt. The pre-approval letter shows the maximum amount you can borrow plus a specific interest rate and the loan terms.
Understanding what you can afford is a good first step when starting your search for a new home. Armed with a budget, you can now talk to your Realtor about what you are looking for in a home.
Pre-approval could give you an edge.
Depending on what type of market we’re in, having a pre-approval letter in-hand can give buyers an advantage. More specifically, this is true in a seller’s market where inventory is low and demand is high.
Sometimes two buyers could make an offer simultaneously. Typically, if one potential buyer has mortgage pre-approval and the other doesn’t, sellers tend to favor those who are pre-approved.
It provides bargaining power.
Next on the list of benefits of getting pre-approved as a buyer is flexibility. Being pre-approved may give you more wiggle room when it comes to negotiations.
When sellers know a buyer is pre-approved, they may be more willing to compromise on certain things to ensure the sale happens.
Being pre-approved saves time.
Closing on a new home takes time. On average, according to Forbes Advisor, the closing process can take anywhere from 30 to 60 days.
But if you have a pre-approval letter, it speeds up the process. You may be moving into your new home sooner than you think!
Pre-approval gives a buyer confidence.
Last but not least, being pre-approved as a buyer gives you confidence. When you are pre-approved, a lender has determined that you are qualified for a home loan.
Being pre-approved upfront gives buyers peace of mind from the start.
To summarize, there are two main takeaways. First, getting pre-approved as a buyer gives you a better understanding of what you can afford. Second of all, it shows sellers you are serious about buying a home. But, remember, pre-approval letters are usually only valid for 60 to 90 days. Talk to your Realtor more about your budget and what you are looking for in your new home. Keep reading our blogs for more industry insights!