Why Do I Need a Pre-Approval?
You see a house you have always loved and now it has a “For Sale” sign in the yard! You call the number on the sign and ask the real estate agent when you can see it. The agent says they will be happy to show it to you, but have you talked to a lender yet and do you have a pre-approval?
Well, no, you just saw the house and want to see if the inside is as great as the outside. Then you’ll need to talk to your spouse about it but first, you just want to see it! The agent is reluctant and now you are getting upset – why are they asking you about getting pre-approved? Your finances are none of their business!
Yes and no – while your finances are none of their business, they do have an obligation to the seller to ONLY bring ready, willing and able buyers to view the property. While you may be ready and willing, you also must be able and that requires talking to a lender.
Homes for sale are not open for tourists and the real estate agent is not a tour guide. The agent must be ever vigilant in their duties both to the seller and the buyer. There are two major reasons for insisting you get pre-approved; first you find out what you can afford and show that you are serious about buying a home and second, should your credit have a few blemishes, a reputable lender can advise you how to repair your credit so that you can qualify for a mortgage.
Requesting a pre-approval not only protects the seller but benefits the buyer. So, if you are in the market and will need funding, go to your bank or mortgage company and get that pre-approval. You’ll be better informed and prepared to find the home of your dreams!