Should a Buyer be Pre-Approved for their loan before Searching for Property? Yes or No?
Here in our San Francisco market, I urge all of my buyers to gain pre-approval for a loan before they begin their home search. Many people seem to think that pre-approval is like applying for your entire loan, but it is not.
Once you have chosen a direct lender, Bank, or Mortgage Broker, they will ask you to fill out a loan application and assist you in gathering the necessary documentation and verifications to complete what will eventually become your “loan Package”.
Once the loan professional has verified your income, assets and employment, they are able to estimate the type and amount of loan you will likely qualify for. This will assist you in knowing what your monthly payment, insurance, property taxes and interest will be and in turn, you will know the right price range to look in when shopping for your home!
Now that you have that pre-approval letter you are ready to search. This will give you a competitive advantage, as you will be able to submit offers immediately on what could be the “perfect” property for you with that valuable pre-approval letter. This letter lets the listing agent know that this buyer is already working toward their loan approval and has the right income and assets to qualify for that particular purchase. What do you think about loan pre-approval and working with an agent. Do you feel it is necessary?