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Many online buyers will call a lender while they’re looking to seek information about financing. In the process, they become “pre-qualified”. That gives them a good idea of what they can afford, or more accurately, what loan they qualify for. Shopping for a home without a pre-approval is like going into a grocery store without your wallet.
- Pre-approval differs from pre-qualification. Pre-approval relies on the buyer’s provided information while pre-qualification is when the lender verifies information and documentation provided by buyer.
- You should take it one step further. If you aren’t already and you’re serious about home buying, get yourself pre-approved now. You’ll be in a stronger position to buy when you find the right home.
- You become pre-approved when you actually apply for a loan. The lender checks credit, verifies employment, and often verifies that you have sufficient funds to close. Then once you find your dream home, just about the only thing left is appraisal. Sellers prefer pre-approved buyers because it can cut significant time out of the closing process.
- Pre-approval can really help you to determine your price range. This helps you narrow your choices of homes to buy. You will already know how much you can afford before you even start looking.
- No pre-approval, no accepted offer. When a offer to purchase a home is sent without a pre-approval, many times this offer will get rejected.
- It’s important to know where you stand. It’s like avoiding the annual checkup at with your doctor because you’re afraid to find out if something is wrong. Getting pre-approved before shopping for a loan allows buyers time to fix unexpected errors and simply, to be more prepared in looking for a home and for being a more competitive candidate when your agent submits your offer.
If you’re already pre-approved or would like to learn more about it and get the buying process started, call me today at 808-352-8587 or email me at ColinL@BetterHawaii.com.