Without preapproval, sellers may look the other way
If you're keeping a checklist of things to do as you prepare to buy a new house, be sure to put home loan preapproval at the top.
A preapproval is now more important than ever for many sellers.
Put simply, someone intent on selling their home doesn’t want to waste time with buyers who ultimately will never get the loan they need.
Although there is no industry standard, a real estate agent told me some sellers will only show their homes to legitimate buyers -- those that have written proof from the bank they will qualify for a home loan. Without preapproval, you might never get into the house.
Real estate websites like Trulia have mentioned this requirement, as well.
If you have not followed through with the preapproval process -- one of our 7 biggest mortgage mistakes -- you may be essentially blocked from looking at all your available options. Not all sellers will have this requirement, but it could become more common as the lending industry continues to tighten standards on loan eligibility requirements.
Read our step-by-step process for seeking preapproval.
Not only is a preapproval good for assuring the buyer, you should consider getting preapproved for your own peace of mind. You’ll be hard-pressed to zero in on the homes you should be looking at when you don’t even know which homes will be an option to you.
Through the preapproval process, you'll also learn right away if you're ineligible for a loan. It can be pretty embarrassing to hire your real estate agent, decide on a home, and get your heart set on an idea that will never come to fruition.
Follow Interest.com on Twitter.