So you've decided you want to buy your first home - how exciting! You've been diligently cutting back on your dining out and saving for a down payment. You start binge watching home shows and Open Houses become the weekend activity of choice. But wait, there's one important step you must take before you get too far down the house hunt path; PRE-APPROVAL.
Pre-approval, as opposed to pre-qualification, signifies that the loan application has been taken through a rigorous procedure. Here's why pre-approved buyers are ahead in the home buying game:
If you make an offer on a home and then apply for a loan, you are at the lender’s mercy, who is aware that you do not have time to shop around.
Pre-approval saves time spent looking at houses you can’t afford.
A pre-approval letter from a lender gives you an edge when multiple offers have been made on a house.
Pre-approved buyers can generally close escrow more quickly, since most of the work has already been done.
Once you have your pre-approval you can focus on the fun of finding your home. Enjoy!