A pre-approval letter is a helpful tool for first home buyers. Having a pre-approval will definitely give you an edge over other buyers. Without one, your chances of securing property can be slim. Here are some reasons searching for houses before getting a pre-approval letter can be a mistake.
Real Estate Agents Favor Pre-Approved Applicants
Real estate agents want the assurance that their efforts will lead to a favorable outcome, and that assurance will mainly come from your pre-approval letter. Agents will not be able to tell if you are a serious buyer if you are not pre-approved. They might think that showing you the house would be a waste of their time, and they would otherwise attend to other buyers who are pre-approved.
You Will Struggle with Securing Loans and Mortgage
Before you get a mortgage in Lake Dallas, lenders like primeres.com/lakedallas need to check your income and employment history, credit history and score, and financial assets. Based on those factors, a pre-approval letter indicates what you can borrow.
The amount that lenders are willing to loan you may not always match with what you need or what you think you can afford. This is why you need to be pre-approved before you sign a contract. Otherwise, you will encounter more problems, especially when your lender claims that you cannot afford the mortgage you need.
Pre-Approval Letters Give Assurance to Property Sellers
A pre-approval letter gives sellers the confidence that you as a first home buyer have the means and the motivation to settle your bills. Without the letter, the seller does not have the assurance that you are financially capable of buying the home. The seller may not consider your bid, especially if there are other offers for the property.
You Decrease Your Negotiating Power
A pre-approval letter strengthens an offer. Getting pre-approved gives you as a prospective buyer the upper hand when discussing and negotiating the property’s price.
Skipping pre-approval could decrease your negotiating power. An eager seller may be willing to reject your offer and accept a lower bid from a pre-approved competitor.
A pre-approval letter is a powerful piece of paper that can help you secure your first home. It checks your creditworthiness, and it also ensures how much mortgage a lender is willing to offer you. Most importantly, being pre-approved shows sellers that you are a serious buyer capable of shouldering finances. So don’t start hunting for houses until you have a pre-approval letter.