Why Get A Home Loan Mortgage PreApproval

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Dayton Home Loan Mortgage PreapprovalThere are many important reasons why you’ll want to get a home loan mortgage preapproval and why this should be the first step before ever shopping for Dayton area homes. I come into contact with clients daily who want to jump right into the looking at homes before ever getting their financial framework established. Here are some key reasons why get preapproved:

  1. You may qualify for special home loan mortgage preapproval programs that you likely haven’t heard about. Some programs offer some very attractive incentives however in the case of USDA mortgages for example, they only lend in specific areas. By knowing if you qualify for USDA from the start you can then better focus your time, energy and gas money by searching only homes that meet the USDA criteria. USDA is only one example, there are many others. The bottom line is you want to understand the most attractive mortgage options from the beginning to best position yourself.
  2. Know how much you can afford! This is critical as you don’t want to shop for homes above your price-point, nor do I even recommend spending everything you can afford on a home mortgage. Who wants to be trapped in their own home?
  3. Negotiating power. In today’s economy sellers are very reluctant to accept a purchase proposal from a would-be-buyer not knowing if the buyer has already spoken with the bank and received their preliminary pre-approval letter. Who wants to take their home off the market for weeks only to find out the buyers financials aren’t in order? By submitting your mortgage preapproval letter with your purchase proposal you are far less likely to have it either rejected or countered at a higher price than without one.
  4. Credit surprises. I’ve worked with clients who’ve had the best credit however erroneous items will appear in their credit report that the lender will require an explanation on, sometimes needing physical proof. When this becomes the case it delays the process of obtaining a mortgage. These are all the things that you want to discover well in advance before you risk losing the home of your dreams because you couldn’t close within the designated time frame. Trust me, it happens!
  5. Relaxation. Just knowing that your financial ship is in order can take quite a bit of stress out of the equation of buying a home. Now you can spend more time on the enjoyment instead of dealing with issues that could have been taken care of in the beginning.
  6. Higher quality service. Realtor’s work hard to provide you with great service however it can only be as good as the information we’re provided. There’s an old saying for computer programmers, “Garbage In, Garbage Out”. The same thing is true in real estate, if the Realtor has nothing to go on to start off with then you aren’t being provided the professional service not only you deserve but is needed by the Realtor to do a respectful job, not be a professional tour guide.

I’d like to eliminate one myth of “But it will hurt my credit if I get preapproved”. If your serious about buying a home then this is a necessary step regardless however I have great news. Things have changed, now you can explore multiple multiple banks within a short time frame and the credit reporting agencies know that your shopping for a home mortgage, so it’s not reflected as multiple dings against your credit. This allows you to shop for the best rates.

Getting your ducks in a row by starting out with a mortgage home loan preapproval will pay you back with big dividends. Don’t wait and get started today.

Please leave questions or comments that you may have and happy house shopping!

By Greg Greenwald, Prudential One Realtor

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