| Imagine finding the property of your
dreams, only to have your loan application denied. Countless hours
spent searching, not to mention your emotional investment, all wasted.
This can be an incredibly disheartening experience.
To prevent this from happening, the first thing your real estate
agent will have you do is get pre-approved. Pre-approval lets you
know exactly how much you are able to afford.
Pre-approval shouldn't be confused with pre-qualification. The
latter is usually performed with a lender over the phone, where
they make an assessment of your borrowing potential based solely
on the information you give them.
Pre-approval, on the other hand, is obtained through documented
and verified information. Credit and employment histories are verified,
as well as your income and cash-on-hand. This will give a lender
a realistic portrayal of your borrowing potential.
This also helps you determine if there are any surprises on your
record, allowing you to deal with them before you risk losing the
home of your dreams. There are many horror stories regarding a credit
history soiled by someone with a similar name, or even due to clerical
errors. This is your chance to ensure you will not be adversely
affected by such unforeseen events.
Pre-approval offers you strong negotiating advantages by increasing
your buying leverage. It lets the seller know you are ready to buy.
When faced with several offers, a seller often accepts the one submitted
by a pre-approved buyer, even if the offer is less than the others.
This is due to the fact that pre-approval is the next best thing
to cash-on-hand. It also allows you the opportunity to close quicker,
which can be very attractive to a seller.
For these reasons, pre-approval is an intelligent and advantageous
option for prospective home buyers. Contact your real estate professional
for more information.
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