Preapproval, as opposed to pre-qualification, signifies that the loan application has been taken through a rigorous procedure. Here's why preapproved buyers are way ahead in the home buying game:
- If you make an offer on a home and then apply for a loan, you are at the lender’s mercy, who is aware that you do not have time to shop around.
- Preapproval saves time spent looking at houses you can’t afford OR you may be able to afford more than you think if you just go through the process. Don't be uninformed!
- A preapproval letter from a lender gives you an edge when multiple offers have been made on a house OR without it your contract will more than likely not be chosen.
- Preapproved buyers can generally close escrow more quickly, since most of the work has already been done.
- There are many loans out there to help you that you may be unaware of until you speak with a local lender.