5 Reasons to Get Preapproved for A Chico CA Real Estate Home Loan
January 23rd, 2008categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers
A question that is commonly posed to me by Chico Buyers looking for a new home is, “Why do we need to be preapproved for a property?”
Looking for a little approval? by Mike Wiegert, Broker Chico Homes
Many buyers question this common practice and even resent that their Realtor would suggest the necessity of being preapproved. But in the real estate world there are significant reasons that a buyer would want to get preapproved. The bottom line is that even though many of us want to give the benefit of the doubt, people just don’t really trust other people that they don’t know. Having stated this basic premise, here are some important reasons to get preapproved for a mortgage before you make an offer on a home.
1. First and most important is that the preapproval process allows a buyer
to really know what price range he or she should be looking in or what
they realistically can afford. Who wants to make an offer on the home
of your dreams only to be turned down by a lender for reasons such as
insufficient income, poor credit or maybe an inadequate job history. I
promise, you’ll sleep much better if you know what you can afford and
that you can actually get a loan.
2. As a buyer you will be infinitely more comfortable to the Seller if
your offer is accompanied by a preapproval letter from a reputable or well
known lender. This is especially true if you are competing against other offers. If all offers are the same, I can guarantee that the offer that has a preapproval letter attached will be the winner. Also, if the home is offered as a foreclosure by a lender, that lender will probably not even consider your offer if it is not accompanied by a preapproval letter.
3. Preapproved buyers are able to close their escrow more quickly. I recently had a client call me two weeks before her home, which is in foreclosure, was due to go to sale. By the way, if you’re in foreclosure, don’t do this. Foreclosures don’t go away by themselves so call a trusted Realtor or attorney to weigh your options. Luckily, one of my agents had a preapproved buyer interested in purchasing a home in the price range and area of this home. Because of the preapproval, the buyer was able to close the escrow just two days prior to the foreclosure sale. So if you’re in a hurry to get in your new home or you have a Seller that needs to close quickly, being preapproved can really be an asset.
4. Besides minimizing the uneasiness of not knowing if you can qualify, you’ll know what loan programs suit your particular needs. There are literally hundreds of loan programs and a skillful loan agent or broker can really tailor a loan that not only gets you into a new home, but can solve many other financial problems as well.
5. Lastly, your lender will give you a written good faith estimate of closing costs and fees so that you will know exactly what you’re going to need to close your new home. With interest rates well into the fives, it’s not only a great time to buy, but a fantastic time to get yourself preapproved.
Need a recommendation for a reputable Chico lender? I would be happy to assist you!
More on prequalification:
What is the Difference between Prequalification and Preapproval?
Why Should I Get Preapproved for a Chico, CA Home?
Paperwork you need to get approved for a CA Mortgage
Your Chico CA Loan Application- It’s Not THAT Hard!
Lenders beware: How to lose a Chico, CA Realtor (and therefore buyer) in 3 days
We as real estate professionals don’t emphasize the importance of pre-approval like we should. Good list!
Timely post, keep on educating! Terry McDonald
Pre-approval allows you to go shopping for a home with confidence about your buying power, but it still isn’t a guarantee that the lender will approve the loan if your credit situation changes just before closing. Important to tell buyers not to make big purchases before they close.I’vegot some interesting stories about that!!
Really good information here that all buyers should know about – thanks for helping to spread the word!
Getting pre-approved for a home loan is more important in today’s market. Lending requirements are higher and some buyer’s that would have easily been approved a few years ago can no longer be approved. Pre-approval helps the entire process run smoothly and doesn’t leave room for disappointment.
As a Newbie, I am always searching online for articles that can help me. Thank you