We get it – there are a lot of steps on the road to home ownership, and you’re probably wondering if you need every single one. For example, do you really need to get pre-approved for a home loan? Short answer: yes. There are many advantages of pre-approval. Here’s the longer explanation as to why:
Getting pre-approved for a home loan helps on a lot of different levels. It can help you clearly understand your finances and allow you to create a budget for the purchase of your potential new home, and shows both your realtor and sellers that you’re serious, and a viable buyer. Certainly this is important to both show and prove you’re already pre-approved when the market is hot, but even if it’s not, it’ll help you to stand out because you’ll be more confident in the negotiations when you find that great deal, and stand above the other people you’re battling for the same space.
Think of pre-approval as added insurance that helps support you during your journey to home ownership. While getting pre-approval doesn’t guarantee you a loan, it’s a step up from pre-qualification, and shows that you’ve gone through the evaluation process with a lender and they determined you’re a viable loan candidate. Granted, nothing will confirm that quite like landing the loan itself, but this is the next best step, and only helps you on your quest.
Although you can find a lender to work with in person on your loan pre-approval application, you don’t have to go that route. In fact, you don’t even have to leave the couch if you don’t want! Just gather all your information together and apply on-line for pre-approval through www.vylla.com .
Our relationship specialists are on hand to help you through the process as necessary. Should you get pre-approved, you’ll be able to download your pre-approval letter right to your desktop, and then use it to secure a solid realtor who can help you get started on your home search.
Your pre-approval will be contingent on your financial status, credit report and score, your employment history and more. Make sure you provide the most accurate, up-to-date information that you have so your lender can evaluate your pre-approval based on that picture.
Once you get pre-approved, you’ll see the maximum amount you qualify for based on the information you provided … but remember, this is just the maximum amount you qualify for, not the amount you necessarily should apply for. Determine the monthly amount you’re comfortable with and work with your lender to determine what amount best suits your needs, and use that as your guideline as you start searching for houses.
Having a pre-approval letter will help you be competitive in a hot market, because it makes you stand out – and makes your offer more appealing to sellers. And if you’re pre-approved for a loan that’s more than the asking price of the house you’re interested in, sellers will know you’re more likely to get approved for a loan, and therefore be able to close with confidence – which may mean a shorter escrow.
You may not even need to have a contingency related to loan funding in your Real Estate contract, as it’s likely your loan will close on time – but discuss this option with your lender to ensure you’re making the right decision.
Basically, pre-approval is an ace in your back pocket. Use it to your advantage, and discover how quickly it can help you become a homeowner!