The Benefits of Getting Pre-Approved for a Home Loan
If you're in the market for a new home, you may be wondering if you should get pre-approved for a loan. While there's no right or wrong answer, there are some benefits to getting pre-approved that you may want to consider.
1. Helps you determine your budget
When you get pre-approved for a loan, the lender will tell you how much money you're eligible to borrow. This can help you narrow down your search to homes that are within your price range.
2. Gives you negotiating power
In a competitive housing market, sellers are more likely to accept an offer from a buyer who has already been pre-approved for financing. This is because the seller knows that there's a good chance the deal will actually go through.
3. Simplifies the homebuying process
Once you find a home you like, getting pre-approved can streamline the rest of the process since your loan has already been approved and all that's left is to finalize the details.
4. Helps you lock in a low interest rate
If interest rates rise between the time you're pre-approved and when you actually get around to buying a home, you'll still be able to lock in the lower rate that was available at the time of pre-approval.
5. Allows you to shop around for loans without impacting your credit score too much
When lenders pull your credit report in order to pre-approve you for a loan, it only counts as a single inquiry on your credit report—as opposed to multiple inquiries, which can ding your score slightly each time. So shopping around for loans won't have as big of an impact on your credit as it would if you weren't pre-approved.
6. Gives peace of mind knowing exactly how much money is available to spend on a home before making anoffer
There's nothing worse than finding your dream home only to realize that it's out of your price range—but if you've been pre-approved for financing, then you'll know exactly what your budget is before starting your search..
As you can see, there are quite a few benefits to getting pre-approved for a home loan before beginning your search—so it's definitely something worth considering if you're thinking about buying a house in the near future!