The Value of a Pre-Approval

    Buying a home in an active market such as Raleigh-Durham can be a fast-paced process – especially for first-timers. At Go, we’re always working hard to help our clients navigate the home buying process providing our expertise at every turn to ensure you’re staying competitive. Part of this expertise includes connecting you with trusted service providers, such as our friends at Homeside Financial.

    As a buyer, it is extremely important that you work with a qualified lender to secure a pre-approval. Our market is extremely active, so waiting until the last minute to get pre-approved can cost you valuable time – or even your dream house! As a buyer, you may wonder – as long as I intend to close, why does a pre-approval matter? Well, it matters a lot. Sellers and listing agents view pre-approvals with significant weight as it is the most credible way of ensuring you intend to follow through with an offer to purchase. Further, working with a trusted mortgage provider strengthens your pre-approval as agents can often give preference to a lending institution they have experience with and can advise their clients of the credibility of.
    Pre-Qualification vs. Pre-Approval
    An important distinction to note is the difference between a pre-qualification and a pre-approval. A pre-qualification is when the lender makes a cursory examination of the prospective borrower’s finances to estimate how much a buyer may qualify for. Pre-approval, on the other hand, is actually an extensive process during which the mortgage lender examines the client’s debt, income, savings, assets, and credit report to ensure that the borrower can repay the loan. In essence, a pre-approval states that the prospective buyer is qualified for and would definitely be approved for a loan. Buyers who take the time to go through the process are serious buyers; buyers who are pre-approved are viewed as the most qualified buyers.
    Save Yourself Time
    In addition to providing evidence of your qualification, a pre-approval can actually save you time in the home search process. While a pre-qualification can give you a rough estimate, it is best to view homes you know you can qualify for, rather than those you suspect you might qualify for. Many agents will expect that you secure a pre-approval prior to taking you on multiple showings.
    What If I’m Pre-Approved for More Than I Want to Spend?
    Don’t worry. Your pre-approval is your property and confidential between you, your agent, and your lender. When you identify a property that you would like to make an offer on, your lender can put your offer amount and property address on a “pre-approval letter,” which will state that you can qualify to pay for the home your interested in, yet it won’t show all your cards if you are approved for more. This letter is almost always included with offers to purchase. If you haven’t been pre-approved prior to identifying the home you want to make an offer on – this letter can be difficult to get in a short amount of time.
    How Do I Get Pre-Approved?
    We recommend that you contact a trusted lender. If you are working with an agent, they often have lenders that they have worked with in the past that they trust and refer to. There is no benefit to agents for referring this business, so don’t be shy about contacting a lender that was referred by an agent. The reason agents refer particular lenders is that their experience with them has been positive and the lender has come through with the details that matter in a transaction. While you are free to shop around (and we recommend that), we do suggest that you take agent referrals serious.
    Our trusted lender here at Go is Homeside Financial. To discuss getting approved today, simply visit the Finance page on our site.
    Want to be taken seriously? A pre-approval is definitely in order!


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