Advantages of getting preapproved before making an offer
Jun 11 2012 3:44PM
The current housing market remains competitive as high affordability has enabled more consumers to become homeowners. While being able to make a large downpayment can help a buyer's offer come out on top, the New York Times highlights the many benefits of getting preapproved when purchasing a home for sale in Los Angeles County.
Getting prequalified can help buyers to determine a price range for this major purchase, but getting preapproved may look better to sellers, as it indicates the offer has already been somewhat backed by a lender. Information, such as a buyer's income, credit score and assets are used to determine their approval.
When there are multiple offers on a single home, sellers may be more likely to select a buyer who has a preapproval letter from a lender that shows the borrower is qualified. While details won't be included, the Times notes that they are given later in the buying process. Buyers are advised to obtain a preapproval letter within 30 to 60 days of the predicted purchase date, as some can expire.
According to the news source, some lenders may be willing to waive application fees, in this situation, as many potential buyers seek preapproval from multiple providers, and do so to remain competitive.