• SRlogo-1
  • SRlogo-2
  • SRlogo-3

Loan preapproval – the advantages of loan preapproval

Real estate agents will advise you that it is much better to have a preapproved loan letter than to be prequalified for a loan. A preapproval letter for a loan is a letter from the lender that expresses confidence in the borrowers’ ability to payback the loan. The lender would consider credit, employment and bank references in establishing this ability. While prequalification only suggests the borrower is credit worthy.

The advantages of a gaining preapproval:

You can now look at homes that are within your budget – Ask your real estate agent to send a list of homes that are within your range. This way you are not wasting time looking at homes that are unaffordable or below your budget.

Gain confidence – Now you can be confident your dream home is yours, because no one can disqualify you at any point during the transaction.

Increase your bargaining and negotiating power – The seller will be more likely to accept an offer from you because they know that you are able to buy the property and you are a secure candidate. This can also mean that if your offer is lower than others are, you may still have a better chance in being the candidate of choice.

Faster sale – Since most of the processing procedures are complete, the lender can give you the funds you need faster. This means that you can start living in the home of your dreams quicker.