A pre-approval letter begins with the bank of your choice. You will need certain documents to become your lender. Once they have reviewed everything, your bank will let you know the price range you can afford. In other words, what is the maximum amount you should be looking for in your search. The process is quick once you submit the required information, possibly within 24 hours. Contacting your bank also familiarizes you with an estimated monthly payment.

Additionally, some sellers may require a pre-approval letter before arranging visits with you, as the seller may also want to verify that you are qualified. This ensures that your time and theirs are used efficiently by reviewing homes that are actually within your budget.

Buy smarter, not harder

Once you’ve found “the one”, having pre-approval will speed up the first part of the contract offer process. I’ve shown several homes or properties where buyers fell in love with the property and wanted to make an offer, but then either couldn’t get pre-approved or realized the payment would be more than they expected. wanted it. You can easily avoid this pitfall. Getting pre-approved takes minimal time, but will bring you great benefits.

Interest rates change quickly, which also has a big impact on your payment and pre-approval amount. This is why it is important to consult with a lender to express the amount that you are comfortable paying each month. When my husband and I bought our first home, we found out we were pre-approved for $250,000. But then we realized how high our monthly payment would be at that amount. I knew we couldn’t afford it. Financially on paper we could afford it. But we also wanted to do additional things with our money.

After consulting with our lender, we decided we would be more comfortable buying homes under $150,000. By reviewing our budget in advance, we didn’t waste our time, a salesperson’s time, or our real estate agent’s time looking at homes in a price range we weren’t comfortable with. ‘to buy. Not to mention that seeing houses in the higher price range would have caused us great disappointment when we moved to the lower price range.

Benefits of working with a local lender for pre-approval

Local lenders offer competitive packages

Major business lenders advertise and promise low interest rates and fast closings. However, they are also good at hiding flaws in their business. In my experience, local banks offer competitive rates and “packages” as much as a large corporate bank. I work with many local lenders who offer comparable rates and lower closing costs (once you’ve found the home) than most out-of-town lenders. In some cases, I’ve seen closing costs that were double the local lender’s. Interest rates are therefore not the only thing to consider. Closing costs will also have a huge impact.

Local lenders offer a creative financing option

Local lenders also offer many loan options. Often they can get you a conventional loan for 3% or 5% down payment, not the commonly heard 20% (although they have that too). They also offer USDA (0% down payment), FHA (3.5% down payment) loans, and options to get help with your closing costs without having to bring cash to closing. And because they’re local, you can avoid long waits on the phone to speak to someone. You can sit face to face with a local lender.

A local lender does the extra work because he lives in the community

Local lenders are also returning to your community. They donate time and money to sponsor events and generally take pride in treating their customers with respect. These lenders live in your city or near you. This means they have a vested interest in making their customers feel valued. I know many who work after 5 p.m. to take care of their customers. On top of that, a local lender stays in close contact with your realtor for updates, status, and provides the information needed to move the deal forward. They also communicate quickly with the title company, which can be a crucial element in meeting the deadlines and the expected closing date.

A local lender gives you a more personal experience

Having a lender who knows you and your family or your history gives you and the lender a more personal experience. Many times you might even see your local lender at a children’s sporting event, store, or restaurant. On the other hand, a business lender involves a less personal approach and may entrust you to someone else in the business throughout the transaction. Also, individual personal commitment may be lacking when working with an out-of-town business lender.

Whichever bank you choose, a pre-approval letter is the best first step to buying your home or property. This letter informs and equips you to boldly face the real estate market. Once you have it, you will look for homes with courage and confidence, knowing that you are qualified and the target price range you want to pay. A pre-approval letter puts you in front of a buyer who hasn’t taken the time to do so. But if you’re still unsure, I’m free to tell you about getting started. Or you can contact the realtor you plan to work with in the future. Either way, a pre-approval letter benefits everyone involved.

About the contributor: by Kati Adair strong work ethic continues to serve clients both locally and nationally. Credit for her success goes to her repeat clients and the new ones she meets along the way. She ensures that her clients receive the best possible experience when buying or selling. Although she holds a master’s degree in educational leadership, she continually progresses as a real estate agent, going above and beyond to receive the nationally recognized award. Certified real estate agent® Institute (GRI) designation. Over the years, Kati has proven to be one of the top contenders among Hopkins County officers. She can be found at the multi-million dollar production office, Janet Martin Realty.

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