In the last few years, there has been a shift in the housing market. You used to be able to look at houses, make an offer, and then head to the bank to obtain a loan. If you didn’t qualify for that loan, you just simply walked away from the house. Now, you may not even have an offer accepted without pre-approval. Here’s why:
Housing Markets are Moving Much Faster
Since we now live in a digital world (internet, cell phones, e-mail), the housing process is moving much quicker. If you are interested in a house, you can see it within hours instead of having to wait for your real estate agent to call you back and schedule an appointment. Therefore, offers happen faster. If you’re not preapproved but put an offer on a home anyways, the seller will likely pass you over because it could take several weeks for you to be preapproved. They’re much more likely to choose a buyer who is already pre-approved and ready to commit.
You Will Know Your Price Range
When you get preapproved, you know exactly how much home you can afford. Also, you will be able to see what you can afford on a monthly basis, which is important since most people stay in there home for less than ten years at a time.
Be On Par With Other Buyers
If you’re preapproved for a home loan, you’re giving yourself a competitive edge because you’re ready to go. In the eyes of the seller, this makes you a serious buyer who is really adamant about buying that specific house.