NC101

• Share
  • Share this post on
  • Digg
  • Del.icio.us
  • Technorati
  • Twitter
  • 
  • 
  • 

When your real estate agent suggests that you get pre-approved for a mortgage, go for it! Becoming pre-approved is a big step that establishes your credibility as a buyer. Becoming prequalified is a more casual process that is based on a few credit checks and the lender's opinion. In contrast, having a pre-approval letter proves that all of your necessary references have been both checked and verified. Here are three more reasons why it's a good idea.


1. Sets your budget.
Going through the pre-approval process will prevent you from wasting time looking at properties that are out of your price range. In the long run, it will also save you time and allow you to focus on the realistic contenders.


2. Lets sellers know you are serious.
Approaching a potential home purchase with a pre-approval letter also ups the ante on your bargaining power. A seller who is goal-driven about selling their home is more apt to negotiate with someone who's made the effort to show they have the financial means to close the deal.


3. Allows you to establish a relationship with the lender.
Committing to a mortgage also means pledging to a long-term financial agreement with a lending institution. The pre-approval process is an excellent way to discover how your chosen mortgage lender does business. When the pre-approval process is all said and done you can also ask yourself, "Is this mortgage company the right one for me?"