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"Why Should I Bother To Get Pre-Approved Before Looking at Houses?"

This question is not typically one that I hear asked out loud, but I know it's important to educate our clients on the importance of obtaining a pre-approval before shopping for a house.

There are multiple reasons to do this:

You won't waste your time looking at properties that are too expensive. Many first-time home buyers (and buyers in general) are payment-conscious, and they have a strong sense of how much they are willing to pay for a home each month. If you speak with a mortgage lender before you start the home search process, you'll have a good working knowledge of which homes will be within your comfort zone. It's a very unpleasant experience to fall in love with a specific home, only to find out that it exceeds your price range.

You will be able to make your decisions faster. If you begin shopping before you have this information, then you find a place which is slightly higher, it's best to have an agent and a lender who can provide solid counsel. An increase of $5,000 or $10,000 may not make much difference to you, or it may be a deal breaker. It's best to be equipped with knowledge, along with advisors who can make the process smoother.

You will have more leverage when it's time to make an offer. In today's competitive market, you have to be able to demonstrate your ability to complete the purchase when you decide on a home. Sellers and their agents will want this in hand before they accept your offer.

Your buyer's agent will probably require it. We do. As real estate agents, we don't get paid to show homes, so we have to be careful about how we spend our time. Truthfully, if you find an agent who doesn't care if you're pre-qualified before they start showing you homes, you've probably just found an agent who doesn't really know what he/she is doing. This whiffs of desperation.

Is there a difference between pre-approval and pre-qualification? Well, yes and no. The terms are typically used interchangeably. Basically, there's no way for a lender to fully pre-approve a loan without any property details, including the appraisal to determine the home's value. That being said, there are varying levels of pre-qualification that a lender can achieve for you. I have worked with lenders in the past who issued pre-qualification letters based on a cursory phone call with my clients. These days, lenders generally want to pull your credit scores (at a minimum) and have a brief loan application to determine your debt-to-income ratio.

When it's time to start your Austin Texas home search, call me at 512-796-7653 or email I look forward to helping you find the right home.
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