Most lenders and real estate experts often suggest that before a prospective home buyer even begins the search for the right home it is important to submit applications for a mortgage before anything else. This advice goes beyond the pre-qualified stage, and provides the more serious home-hunter with a few significant advantages. Once they have a pre-approval letter in hand, borrowers can really get down to business.
Saving Time and Money
When a borrower is pre-approved, real estate agents can direct listings of potential purchase options specifically geared toward the pricing range of the loan pre-approval status. This saves considerable time and trouble for the borrower, having only to view their options that fit into their budget, instead of those that fall outside the range of requirements.
Focusing on the Right Options
With a short-list of home buying options that are most favorable to the borrower’s cost parameters, more time and energy can be applied to the more intrinsic details of the home purchase. This means better investigation of local neighborhoods, schools, and services, along with the physical necessities like adequate square footage, appliance upgrades, or remodeling needs.
Better Bargaining Influence
Because the borrower holds that letter of pre-approval, more sellers will be willing to accept an offer to purchase, oftentimes even if the purchase price is lower than what the seller is asking. Knowing that the pre-approved offer can move quickly into a pending sale status, and taken off the market, encourages most sellers to readily accept a pre-approved buyer’s offer with a greater amount of confidence.
Quicker Closing Process
Pre-approval status dramatically reduces the whole mortgage processing agenda, simply because the application procedure has already been taken care of. If it happens the seller requires immediate decisions to be made based on their needs, and has multiple offers on the table, the pre-approved buyer will more than likely tip the scales in their favor due to expediency. Even a standard month-long closing schedule can be reduced to two or three weeks, giving the seller further incentive to close the deal.