Getting Preapproved

A preapproval is your lender’s written commitment to finance your home pruchase up to a specific amount. Getting preapproved is a smart move for serious homebuyers because it shows sellers that you come to the negotiating table ready to complete the transaction.

Preapproval vs. Prequalification

A preapproval indicates that a lender has taken a detailed look into your financial background and has committed to lend you a certain amount of money, pending specific property details.  Because preapproval includes a credit check, it’s more powerful than a prequalification letter, which generally only estimates  what you can afford based on information you’ve provided.

What are the advantages of being preapproved?

Preapproval offers a number of advantages over waiting to apply for a mortgage until after you’ve found a home. It lets you:

• Shop for a home with the confidence of knowing exactly how much you can afford.
• Take advantage of the preference many home sellers have for preapproved buyers.
• Find out about possible problems early in the home buying process.

Who can benefit the most from preapproval?

Preapproval is a great advantage for anyone buying a home,but it can be especially useful for buyers looking for their first home and those who are self-employed or work on commission.