Your real estate agent keeps nagging you about getting “pre-approved” or getting “a fully underwritten pre-approval.” What’s the point? You know what you want to spend on housing, and you figure you can just get a loan once you’ve locked a house under contract, right? Let’s explore this common realtor nagging point with a good ol’ fashioned pros and cons list.
Pros:
- You know exactly how much money a bank will loan you, not just how much money you’re hoping to spend (so you don’t waste time on shopping for homes you can’t afford or buying less home than you want to afford)
- You have a working relationship with a lender or broker, ready to proceed with all of your information once you find “the one”
- You can attach that pre-approval letter with offers (in Los Angeles and other competitive real estate markets, this is practically a requirement)
- You have knowledge to shop around—don’t like the rates of one lender? Is the first lender non-responsive? Shop around! The last thing you want is to be ghosted or gouged by your lender when a home is under contract and it’s time to remove loan contingencies
- You have a clear picture of your financial circumstance as it pertains to homebuying. Maybe you’ll discover it’s best to wait 6 months or a year to save up more money for a down payment or maybe to pay down some debt or even work on that credit score
- You are ready to be a home buyer (on paper, at least)
Cons:
Any questions? Call us. ADUplexla.com