Why Is Preapproval So Important?

Preapproval shows sellers that you are serious about buying property. It is a step beyond prequalification, which quite frankly, doesn't mean much. This is because a prequalification letter from the bank doesn't quite have the weight or probability of success in receiving a loan once applying for one.
For those unaware, when buying a house with a loan, one needs to talk to a loan officer who then provides all potential mortgagors with an idea of how much loan they are most likely going to get. A prequalification letter just gives an idea of what a borrower might expect, but a preapproval is a highly likely probability of a loan for x amount of dollars.

Usually it takes 2 to 3 business days for a preapproval to get processed, but the reason why it is so important for sellers is because it shows that you are not wasting their time. Also, when making an offer, it shows sellers that you are most probably going to get the loan and that the deal will go through.

As a buyer you want to minimize the risk to a seller that you are not wasting their time and that you are solvent enough to purchase a title from them. It takes at most 60 days for a transaction to go through, so if a seller doesn't think you are able to purchase their home from them, they will go with a more viable buyer. Think about that for a minute.

Next time anyone tells you that a preapproval is not necessary for an offer, think again. It is an important piece of the buying puzzle. You don't want to let your dream home slip by your fingers because you didn't have the preapproval letter ready to send in with the offer. You want as many variables in your court as possible. Don't waste your time and most importantly don't waste the seller's time as well.

Video on this coming on my YouTube channel very soon. Don't forget to subscribe to the channel or my newsletter!

Why Is Preapproval So Important? Why Is Preapproval So Important? Reviewed by Alex Sung on January 26, 2020 Rating: 5

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