Why Getting Prepproved Before House Shopping Is Vital
When you contact a real estate agency to talk to an agent about finding a home to buy, the agent will want to know if you already talked to a lender about getting a loan. If you have not, the agent will recommend doing this first and then calling back after you get pre-approved for a loan. Here are the reasons agents recommend getting pre-approved before shopping for a loan.
You will not waste everyone's time
If you shop for a house and end up making an offer on one, what would happen if you contacted a lender and found out that you cannot get a loan? If this happens, you will have wasted your time and the time of everyone else involved. Because of this, agents and homeowners want to make sure that anyone who views a house is qualified for a loan so that they are not wasting their time.
You will know what kind of loan you can get
When you get preapproved for a loan, you will find out what loan type it is. This could be a conventional loan, FHA loan, VA loan, or USDA loan, and the type of loan you qualify for could limit the homes you purchase. Most homes can be purchased with any loan type, but there are times when homes will not qualify for certain loan types. For example, a USDA loan might have more restrictions with the homes you can buy, whereas a conventional loan might allow you to choose any home. Knowing what kind of loan you qualify for will help you know what homes you should view.
You will find out your budget
The other important reason for getting preapproved is simply so that you can know what your budget is. If you do not get preapproved, you might have no idea how much you can spend on a home. Because of this, you might end up shopping for homes in a price range that is above what you can afford. If this happens, you might have problems closing on a loan if the home you selected has a price that is too high. When you get preapproved, you will know the top limit you can borrow, and this will help you know what types of homes to view.
If you recently found out that your lender preapproved you for a loan, you should contact a real estate agent to begin shopping for the home of your dreams. For more information on how to buy a home, contact your local realtor.