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Pre-approval for a home ... why do I need this? | Real Estate

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Pre-approval for a home ... why do I need this?
Real Estate
Pre-approval for a home ... why do I need this?

ATLANTA -- If you are looking to purchase a home in Atlanta and the surrounding area, you may want to know what exactly a pre-approval is.

This simply means that you have met or spoken with a loan officer, your credit and income files have been reviewed and the loan officer believes that you can qualify for a given loan amount. Based on this information, the lender will then provide a pre-approval letter, which shows how much home you can purchase.

Getting your pre-approval before you begin shopping for a home will help you and the real estate agent determine exactly how much home you can purchase, as well as give you a close proximity of what your monthly housing payments will be. This will also help you stay within your financial means.

Although not a final loan approval, the pre-approval will likely be shown to sellers when bidding for a home. It demonstrates your ability to purchase and your financial strength. Owners selling their home do not want to accept an offer that is likely to fail due to lack of ability to obtain financing. Having this pre-approval obviously puts you in a much stronger position to get your dream home under contract.

Going through the pre-approval process will allow you to find a house you can actually purchase so you don’t waste time searching for a home you cannot afford. This will allow your agent to send you homes to look at that are in your price range. Getting the pre-approval also helps the loan process flow much smoother and the loan close faster, since most of the work of gathering documents were taken care of up front and the loan process was explained.

Whether a first time home buyer or purchasing your fifth home, having a pre-approval letter will create the right expectations for you as a home buyer, your real estate agent and the selling agent. This is a crucial step of the home buying process. 

With whom you choose to get pre-approved is also important. Be sure to select a reputable lender when getting your pre-approval.

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