Why? For a few reasons:
1. Budget – Getting pre-approved will help you set your price range / budget for your home search. You don’t want to be in love with a house, but not looking at it thinking it’s out of your range or be looking at homes you are not qualified to purchase.
2. Submitting Offers – Some sellers require pre-approval letters with offers. You don’t want to be ready to submit an offer and then starting the pre-approval process. Plus, offers with a pre-approval letter are often times considered more serious as they know you have the financial peice taken care of and are a serious buyer.
3. Options and Shopping Around – If you start early, you’ll be able to speak with different banks and brokers to make sure you are getting the right mortgage package. I recommend speaking with 2-3 lenders. And if you are a first time home buyer, you may want to giev yourself time to understand the different loan types available.
4. Easier down the Road – If you get pre-approved, you’ll have an easier road when it comes time to get your financing in place. You’ll have an idea of what lender you are using and they’ll have a file of the records needed to start completing the loan. Items like:
– Bank Statements
– Income Tax Returns
– Credit Score/Report
Getting pre-approved at the beginning of your home search is extremely helpful once your search gears up or you have found the right home and are ready to buy!