Pre Approved Financing
Should I get Pre Approved for Financing?
In this rocky economy there are less and less ways to receive financing from the normal lending institutions. People who are selling their homes know this as well so they are more skeptical of potential buyers when they are putting their homes on the market. Pre approval for a loan can help ease this and other burdens when you are shopping for a home. Pre approval can also help in other ways as well, which we will go over in detail.
Most people that are selling their homes are not professionals. They may have a professional real estate broker helping them out but even still they know that this is a buyers market. Being that this is a buyers market it can make a non professional seller feel edgy. So since they are already feeling edgy about selling in this sort of market they are not going to want to waste their time showing everybody their home.
They know that most of the people that are coming to look at the home will just be browsers and not be able to afford the asking price. If you go into a negotiation with a pre approved letter this will give you the upper hand in the dealings that will come next. They know that you will be able to deliver on your word and will go out their way to have you spend your money with them. The housing market is not like it once was when sellers could afford to be picky. In a lot of cases they have to take what they can get.
A pre approval letter will also help speed up the process. When you have a pre approval letter this basically means that you are half way done with the process of receiving your financing. You will still have to complete your financing but being half way done is better than having none of it done at all. This way a seller knows that once you have agreed to a price point that it will not take them that long to receive their money. That is always a good thing to hear when you are selling a big ticket item such as a home.
Having a pre approval letter from a lender will also help you as a buyer narrow down and be more specific on what you are looking for. Since you already know the amount of the loan that you can receive, you will not go wasting your time, looking at houses that you can not afford. You will also avoid looking at houses that may be below your price range as well. Being pre approved will let you concentrate on houses in your price range and start to look into the details of the houses themselves. You will now be able to search for more value out of the houses that you can afford to purchase.
So from the points that we have listed you can see how receiving pre approval from a lender can be a good thing in the long run. It will help make the seller more comfortable as well as letting you shop around more for value and less for price point. It also helps speed up the process which would make both you and the seller happy.