The mortgage preapproval process is something you can use to find out if you qualify for a loan and the terms of the loan, but is this something you need to do before you begin shopping for a house? Most agents will tell you that it is something you definitely need to do before you begin house shopping; however, some people do not go through this process before they start viewing homes for sale. Here are several things you should know as you decide whether to get preapproved before you start house shopping.
Some agents might not work with you until you get preapproved
The first thing you should realize is that there is a chance that you may encounter agents who will not work with you until you are preapproved. Agents often have this rule, not only for their sake but also for the sake of people selling their homes. Showing homes to people who are not preapproved is risky, as there is always a chance a person who views a home will not qualify for a loan. Because of this, it is a better choice to get preapproved first and then hire an agent to help you view homes.
Getting preapproved helps you establish guidelines
Secondly, getting preapproved is one of the best ways to help you establish guidelines for house shopping. The main guideline it offers is a budget. The lender that preapproves you will give you a dollar amount, which indicates the top amount you currently qualify to borrow. This amount is subject to change if your income changes, though. Additionally, you should understand that if your income or credit changes, there is a chance you will not be able to get a loan from the lender that preapproved you.
The preapproval process helps speed up a home purchase
Finally, you should understand that the preapproval process is helpful for speeding up the purchase of a home. Once you choose the house you want, your lender will already have most of your financial information. What this means is that it makes the lender's job easier to qualify you for a loan. If you want to speed up the home-buying process once you find a house, getting preapproved before you start your search is a great way to do this.
While getting preapproved is not completely necessary in all cases, it is usually a good thing to do beforehand. You can talk to a real estate agent at an agency such as Roseville Homes to learn about other steps you should take when buying a house.