Pre-approval is a huge weapon in your arsenal. Getting pre-approved lets you and your agent know “How much house can I afford.” Often, you can negotiate a lower price because you are pre-approved for a loan. This means that once the seller agrees to the sale, if the house appraises at the contract price or above, the loan will go through. Pre-approval means that the bank has already checked out your credit history, looked at your assets/debts and verified your employment. and has no trouble loaning you X amount of money for a home. It is then up to you and I to find a home you can purchase for that amount of money.
Offers written by buyers who are already pre-approved are much more attractive to sellers than those from buyers who haven’t yet spoken to a lender. Sellers do not want to risk taking their home off the market, only to find that their buyers loan request gets turned down.
In today’s real estate market there is a new “Golden Rule”. He who has the gold, makes the rules. This is why I have my clients get pre-approved first. This answers the question, “How much house I can afford”?