Pre-Approval in 2023: What You Need To Know

One of the first steps in your home buying process?is getting pre-approved. To understand why it’s such an important step, you need to understand exactly what pre-approval?is and what it does for you.

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand your options and what you may be able to borrow. The lender will explain which types of loans you may be eligible to take out, how much you’ll likely be approved to borrow, and what your rate may be.

How does it work? As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with higher mortgage rates?impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their house.

This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, pre-approval maximizes the chances you’ll be able to definitively close the deal. Sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step prior to you venturing out to find your ideal home.

Bottom Line

Getting pre-approved is an important first step towards buying a home. It lets you know what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to purchase a home in today’s market.