Why Do I Need to get Pre-approved for a Loan?
Q: Is there any reason to get preapproved for a loan?
A: For a large purchase, such as a home or car, having that preapproval in hand before you start shopping is crucial. A preapproval is a written letter from a lender specifying how large of a loan you will be eligible for. The letter will also detail your estimated interest rate on the loan.
Here are some other key advantages of getting a preapproval:
1.) You’ll know what you can afford
Having this information in hand will simplify your search. It will also help you avoid disappointment later. Be sure to calculate other monthly costs, such as property taxes, home insurance and increased auto insurance rates when determining the amount of money you’ll need to shell out each month.
2.) Be taken seriously
When purchasing a home, a realtor will be able to assist you more efficiently when you know exactly how much house you can afford. They’ll also give you better service since you’re showing that you’re serious about buying a home. In fact, many realtors will only work with buyers who’ve obtained a preapproval.
3.) Know you have financing you can trust
When you show up at the car dealership with a preapproval from your credit union, you know the deal is in your best interest.
4.) Purchase your dream home
A preapproval helps you stand out from the pack. If you’re house-hunting in a competitive market, having your preapproval will give you a leg up on bidding wars. A seller will be more eager to work with someone who’s already started the mortgage process.
In the market for a new home or car? Don’t forget to call, click, or stop by Sharefax to hear about our fantastic rates on mortgage and auto loans!