I’m often asked this question by BOTH first time home buyers as well as someone who has purchased a home before. Let’s look at this.
You might want to spend $175,000 or $375,000 on your new home. But once you have reviewed the payments with your Lender, you might find that the payment is MORE than you want to pay, even though your income, debt and assets allow you to borrow this amount. The last thing I want to do is be showing you homes, and then you get your pre-approval and find out it’s more than you want to spend. Now you have your heart set on that home or condo, but it’s more than you want to spend.
Another reason for a loan pre-approval is to find any surprizes that might be hidden on your credit report that you don’t know about. You would be amazed…that one credit card bill you did not pay off, or a medical bill that you let go….any number of little items can quickly become a “landmine” that could quickly blow up your real estate purchase. Let’s not let that happen.
Lastly, real estate is again moving, and sometimes at break neck speed. And to get your offer on that home or condominium, we need to be ready to make our offer look the best. And a pre-approval letter attached to your offer can do just that.
Real Estate FAQ’s — Why Do I Have to be Pre-approved With A Lender? Because you want to buy a house!