Getting Pre-Approved For A Loan Before Buying A Home   by Lisa Udy

in Real Estate / Mortgage Financing    (submitted 2011-05-13)

Purchasing a residence requires going through the process of qualifying for a mortgage, finding a home within your budget, and closing on the residence. Being prepared will help the process go smooth and you should which is why you should get pre-approved for a loan before buying a home is in the best interest of the potential homeowner.

Knowing how much home you qualify for ahead of time can help cut down on the number of home viewings. Depending on your price range, you may have many homes or just a handful. Regardless, it is easier to pick from a select group than jumping all over the place not knowing how much you will qualify for.

Having all of your financial information in order will help the process move along. The potential lender will require you to provide information about employment, tax information, as well as verification of the same. If you are self-employment, other criteria must be met to prove to the lender you can afford to make monthly payments.

There are great benefits to knowing how much home you can afford before house hunting. One of the greatest advantages of getting pre-approved is you can narrow down your house hunting search. One a price range is determined, your realtor can focus on finding the amenities you are a looking for within that price range.

Getting a home loan from the lender makes life easier for everyone. You, the buyer know what you can afford up front, the seller can be assured that you have been qualified by the bank so they are not wasting their time, and the realtor can focus on homes within your price range and look more closely for amenities that you desire.

Another benefit is that sellers are eager to work with potential buyers who have been pre-approved. This acts as an insurance policy that you have met the preliminary requirements to buy their home so they may be willing to take less knowing that the deal will go through and they can move on their lives.

Speaking with multiple potential lenders may get you a better rate so do not be afraid to shop around for your mortgage loan. Taking the time to get the best rates now will save you a lot down the road. If you think about a 30 year traditional home loan, even a few dollars a month can add up.

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