If you’ve recently started a new home search, you’ve probably begun eagerly favoriting a few listings online and requesting home tours to kick things off. The bubble of excitement you feel at first may quickly burst if you get a response from a real estate agent requesting that you get preapproved for a mortgage prior to showing you homes.
Before you think their request is invasive (or even offensive), understand that asking you to secure a preapproval is standard practice. There are valid reasons why you should get preapproved for a mortgage before heading to open houses or inquiring about homes.
Shows You’re Serious
A prequalification is different than a preapproval. A prequalification is an estimate from a lender of how much you can afford.
A mortgage preapproval takes this estimate a step further. A lender digs deep into your finances to verify information such as your credit, pay stubs, and employment history to determine how much they’re willing to lend you.
A mortgage preapproval letter separates people who casually visit open houses to eat cookies from those who are seriously searching for a new place to call home.
Many real estate agents aren’t willing to waste their time touring window-shoppers who have no intention of buying, which is understandable. After all, selling homes is how they make a living. They want to focus their efforts on people who are prepared to make a serious offer.
Gives You Boundaries
Besides measuring the seriousness of your home search, a mortgage preapproval makes your homebuying experience much easier.
A preapproval helps you and agents narrow down your search to only properties that will fit into your price range. Initial expectations of how much you can afford may be different than reality (especially if you’re buying your very first home).
Focusing on properties that fit your budget will help you avoid falling madly in love with a home that’s too expensive.
Puts Your Offer Above Others
Submitting an offer with a preapproval in hand can put you leaps and bounds ahead of other buyers who don’t have one. Put yourself in the shoes of the seller. An offer is more attractive from someone who’s already formed a relationship with a lender.
In a competitive market, you should do everything in your power to appeal to the seller of the home that you desperately want to buy.
Ready to find your dream home?
We can help you get the preapproval you need. Your first step is getting prequalified. For your convenience, you can complete our prequalification online. We walk you step-by-step through how the online form works in our guide, How to Prequalify Online with Atlantic Coast Mortgage.