As a first-time home buyer you may not realize the importance of obtaining a pre-approval letter from your lender, but there are several reasons why it’s a very good idea to do this before starting your home search.
Don’t set yourself up for disappointment
What happens when you have been looking at homes in a higher price range, then all of sudden after you get pre-approved you realize that you can’t afford any of the homes that you have been looking at? Scenarios like this often times lead to a huge disappointment, because now you are comparing all the homes that you can afford to the higher priced properties that you looked at earlier.
Besides the obvious reason that you need to know how much home you can afford, there are a few other reasons why you should get a pre-approval before starting your home search.
Show you mean business
Most home sellers are going to want to see a pre-approval letter before they will even consider your offer. This way they know that you are a serious and qualified buyer.
If you are in a hot real estate market like Nashville, where multiple offer situations are common, you will be competing against buyers who already have their pre-approval in hand. Assuming that there are similar offers, the seller will more than likely go with another buyer who has been pre-approved. In situations like this, it can be that easy to lose out on your dream home simply because you did not get a pre-approval ahead of time.
Hopefully this sheds a little more light on why it is important to get a pre-approval. By doing this you will put yourself in the best possible position to have a positive and successful home buying experience.