Buying a home is often times considered one of the most important investments and purchasing decisions a home owner will make in their lifetime.
A home historically increases in value and provides an essential needed commodity of shelter in ones life.
A home will often be one of the most expensive purchases an individual will make.
It seems to be a guiding principle that because purchasing a home is such a big event in ones life, it often times becomes the most complex purchase one will ever make.
Part of the complexity comes from the need for a specific situation, the right home, the right neighborhood, the right community.
The other part of the complexity comes because real estate is so expensive, and most often a buyer will not have the funds to purchase the home in its entirety.
In fact, over ninety percent of buyers will be forced to or will choose to finance the purchasing of a home.
The process of financing a fifteen to thirty year mortgage is of course going to be complex, involve several different personal, and have a lot of complicated forms to fill out and complete.
Because of the complexity of financing, a conflict often arises between a buyer and a seller.
The seller is going to want to know if the buyer can actually make good on their offer.
If a buyer makes an offer the seller accepts and then cannot get approved for a loan to actually purchase the home, the seller might have wasted the time in which to find the perfect buyer.
Also, a buyer might find the perfect home and make an offer and then be given a deadline from the seller in which the seller must know if the buyer will really be able to buy the property.
This deadline may often cause a buyer to rush, or find the wrong type of financing, or even lose the home because the deadline could not be met.
The answer to the deadline rush is for the buyer to meet with a mortgage broker before the search even begins.
Pre-approval allows a mortgage broker to comb over all of the financial records, the credit, and the needed protocols to provide a loan.
The loan officers for the lending institution will pre approve what they believe they can realistically finance and actually provide a letter of pre approval.
The letter of pre approval will give the seller a greatly added measure of confidence in the buyer.
It will help the seller make the decision of who to sell to and also to trust the offer the buyer offers knowing that the buyer is offering a range that they are pre qualified to offer for.
One important not to add is that every different lending institution a buyer shops with will do a credit check.
The credit check will actually stay on the credit report and too many credit checks might actually hurt a buyer's credit because it proves that the borrower is looking at a bunch of different loans.
It is a word of wisdom to suggest that the buyer do some research ahead of time on different lending institution and then actually go to the loan officer and be content on whatever amount the officer pre approves a lender on.