Why Homebuyers Should Get Preapproved Before Shopping for a Home

Posted on: 12 January 2017


If you are hoping to buy a house in the next few months, you should talk to a lender about applying for a loan before you even begin shopping. Getting preapproved from a lender does not guarantee that you will be able to get a loan, but it does help you understand whether you currently qualify for a loan. Here are three reasons you should look into this before you start viewing homes for sale.

Your agent will require it

Most real-estate agents will require prospective homebuyers to be preapproved before they begin showing them homes. This is because real-estate agents get paid only when they close on home sales. If they spend their time showing homes to people who do not even qualify for loans, they will never make money. Because of this, your agent is likely to ask you upfront if you have already received a preapproval letter from your lender. If you haven't, the agent will most likely encourage you to do this before you begin shopping for a house to buy.

You will know what price range to stick with

There is nothing worse than finding your dream home and then finding out you cannot buy it because you do not qualify to borrow the amount of money the home retails for. Getting preapproved from a lender will help you understand how much money you can afford to borrow, and this is vital when shopping for a house.

The amount you are preapproved for will give you a range in which you can stick with when shopping for a house. For example, if you are approved to borrow $170,000, you may want to stick with viewing homes that range in price from $160,000 to $175,000. By sticking with this range, you will know exactly what type of home you can get for the money you have.

It will make the process faster

Finally, if you are preapproved for a loan, the process of closing on it will be easier and faster when you select the home you want to buy. Your lender will already have all your information, and this will give you a head start.

If you want to buy a house, getting preapproved for a loan should be your first step. If you have already completed this step and have a preapproval letter from your lender, contact a real-estate agent such as Amy Willis & Associates LLC today to help you locate homes in your price range.