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Pre-Approval for 2023: What You Should Know

Pre-approval is an important step in your homebuying journey. Understanding what pre-approval means and how it works is crucial. Business Insider explains that a preapproval is a written agreement from the lender. It tells you what types of loans you are eligible for, how much you can borrow, and what your rate might be.
Pre-approval basically gives you important information about the homebuying process. It will help you understand your options, and what you might be able to borrow.
How does it work? A lender will review your finances as part of the pre-approval process. They’ll then decide how much they’d like to lend you. Your lender will then give you a preapproval letter to help explain how much money you are eligible to borrow. This will make it easier to find homes by knowing your total numbers. With rising mortgage rates affecting affordability for many buyers, it’s even more important to have a solid understanding about your numbers.
Pre-Approval Shows You’re a Serious Buyer
Pre-approval can make a seller feel more confident about your offer, as it shows that you are serious about buying their house. Forbes recently published this article:
“From the seller’s point of view, a preapproval letter from a reputable local lender can often make the difference between accepting or rejecting an offer.”
This shows that even though you won’t be facing the same intense bidding wars if you tried buying during the pandemic, preapproval is still a crucial part of making an offer. Christy Bieber is a Personal Finance Writer at The Motley fool. She says that pre-approval may be the most important aspect of making an offer.
“Pre-approval maximizes your chances of closing the deal – sellers want to see that.
Pre-approval increases your chances of having your offer accepted. This is the main reason to take this step. . .”
Bottom Line: Getting pre-approved is an important step in buying a home. It allows you to know how much you can borrow and shows sellers that you are serious about buying their home. Get in touch with a local realtor and trusted lender to help you get the tools you need for buying a home today’s market.
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