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  • Writer's pictureBrett Hodgdon, PE

Here's Why Finding A Home Shouldn't Be The First Step In Buying A House

So, you want to buy a house?

It may seem counter-intuitive to have a pre-step before the main step of working through the home-buying process, but it's an important one: the preapproval.

  • Before shopping for a home, you should probably get a preapproval letter from at least one lender.

  • A preapproval letter states a lender would like to work with you, and it locks in a mortgage rate.

  • A letter shows you're a competitive buyer and helps you move quickly in today's hot housing market.

"One of the best ways to prepare to buy is to get a preapproval letter before you start shopping for homes. When a lender gives you an official preapproval letter, it's stating that it wants you to work with you. The company plans to lend you up to a predetermined dollar amount at a certain interest rate. Once you are preapproved, your rate is locked in for a set amount of time, usually 60 to 90 days," according to Business Insider.

While it's not required, the preapproval can help give you an advantage, especially considering the current market:

  • The United States is a "seller's market" right now, meaning there aren't enough houses for sale to keep up with demand so that means prices can be higher.

  • Negotiations can be more competitive. Having this preapproval letter on your side can make you more attractive to the seller.

  • Houses are being bought up from the market quickly, so if you wait to get preapproved until after you found a house you love, time could not be on your side.

Have you been preapproved for a new house?

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