When you decide you’re ready to become a homeowner, it’s easy to get excited and jump straight into shopping for that perfect place. However, before you start strolling through your dream neighborhood or picking out paint colors, you should be pre-approved for a mortgage loan.
We know that getting pre-approved might not sound as exciting as shopping for a home—but it’s the first, most important step in the homebuying process. Technically, you can look all you want, and even have an agent give you a tour, but it’s only as productive as window shopping.
If you’re serious about becoming a homeowner, having a pre-approval letter is essentially an official letter from your lender stating you are approved for a specific loan amount, demonstrates to a seller that you are a serious buyer and that you have completed your due diligence necessary for purchasing a home. The truth is, no seller wants to get into a sale that drags on for weeks only to find out their once-excited buyer was actually unqualified and unable to follow through with the purchase—it simply wastes everyone’s time.
When you obtain a pre-approval letter from a lender, you have a better idea of homes that are within your price range. It saves time for sellers and agents involved, and saves you from the heartbreak of falling in love with a home that’s more than what you can afford.
Having a pre-approval letter also gives you more buying power when you’re ready to make an offer on a home while you’re house hunting. Buying a home can be a competitive market, so sometimes you’ll need to jump in and make an offer as soon as you can. Having that pre-approval letter ready puts you one step ahead to making that dream home a reality!
So in short, the answer is yes! Having a pre-approval letter is a great idea, and there’s really no downside to going through the process before you begin home shopping.