Pre-Approval: Needed or Not?

by | Feb 12, 2018

This is one of the questions that I get all the time.

In the current market, which seems to be moving like the speed of light, having a pre-approval is an important first step for home buyers of all kinds; first timers or those veterans of the real estate market.  More than ever having your financial ducks in a row is a critical step.  So what is the big deal about it all?  Why Mike should I spend my time going through the proccess before I move or find somewhere I like?

Excellent question!  Let’s look at it as stretching before going for a run.  You can do it, no doubt but it a good chance it could come with some pain.  Let me explain….

Am I ready? LEt’s find out…

One of the things that I always encounter with clients is that they often are not sure if they are financially ready to buy a home or move.  Some find out that they are in better a better position than they thought, and some find out that they are not, often to their disappointment.  Getting the pre-approval process started is a huge first step in finding this out.  Sitting down with a mortgage specialist, you can establish where you stand financially.  At worst, you discover that you need another year to improve credit or increase savings for a downpayment. I would recommend that anyone thinking of buying in the next 24 month goes through this process.  Often when people feel they are ready, financially they are not.  Finding this out a year or two earlier can be such a time saver and allow you to plan for your future.



So you are in a good spot to afford your first home or make that desired move.  Knowing what exactly you can afford is important for a couple of different reasons.  First, it allows me as your realtor to focus on what you can afford based on the market and what areas may be best suited for you.  It is always an intricate dance between what you want and what your affordability allows you to do.  But that beautiful blend is there!  There would be little to no point showing you homes priced at $600,000 if your limit is $250,000.  Second, it allows you to know exactly where you sit it terms of comfort of a mortgage.  A mortgage specialist can walk through and show exactly what your mortgage payments may look like at different price points of the home.  And, a big point is that just because you can afford that $400,000 dollar home as your max budget, doesn’t mean that you have to spend it.  Plan for the future.  What if one us had to stop working?  How long could we live in this home? If interest rates changed in 5 years, could we still afford it?  It’s boring I know but good questions to ask yourselves.


let’s be “serious”!

Having the pre-approval makes you a serious buyer in eyes of a seller.  They understand that you have gone through the process and are actually in a position to buy their home.  This goes a long way, especially in this seller’s market.  When I present offers for clients in a multiple offer situations, having the pre-approval done gives the buyers and the sellers piece of mind that we are serious about buying their home.  Having the pre-approval done also means that the financial institution is prepared and waiting for us to bring them an accepted offer and they are in a position to process it faster.  Without a pre-approval it can take a significantly longer period of time to know if the home is approved by the bank and in a fast paced market, every hour saved is important.


Save yourself time, energy and heart break.  See a professional and get yourself in a position to confidently purchase your first or new home.  Whether it’s next month or next year, knowing where you stand and what you can afford helps take some of the stress out of process.

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