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Home Buyers: Get Loan Approval Before Shopping for a House

Edie Israel

After years of executive sales and marketing experience as well as entrepreneurial success, Edie entered into the real estate market of Southern Calif...

After years of executive sales and marketing experience as well as entrepreneurial success, Edie entered into the real estate market of Southern Calif...

Oct 29 4 minutes read

For home buyers, getting a mortgage pre-approval streamlines the house-hunting process. It allows buyers to know exactly how much they can afford, so they can focus their home search on properties that fit their price range.

But instead of a pre-qualification, why not consider a conditional or full loan approval? Taking your mortgage application to this stage presents several advantages to anyone looking to buy a new home.

Conditional Loan Approval Eliminates Credit Surprises for Home Buyers

To grant a pre-approval, the mortgage lender reviews your income and credit information and uses this data to provide a broad indication of how much you should be qualified to borrow, in a perfect world. This does not automatically mean you will be approved for that loan amount, however.

Buyers can be caught unaware if the underwriter finds a credit issue that prevents them from being fully approved for a mortgage.

If you obtain a conditional mortgage approval, you won’t have the stress of possible credit surprises popping up and ruining your chance of buying your dream home. The underwriter will have already determined that youre a good credit risk for the mortgage lender.

You will still need to have the property appraised before the loan process is complete, but you’ll have the peace of mind of knowing that you can truly qualify to purchase the home you want.

Full Loan Approval Gives Home Buyers an Edge in Negotiations

In the competitive Yorba Linda marketplace, being fully approved for a mortgage before writing an offer can set you apart from other buyers. If the seller receives multiple offers on their property, they may give preference to those with conditional approval.

Why? Full mortgage approval means the home sale can close much faster because most of the documentation and paperwork has already been completed. This gives buyers an advantage when it comes to negotiations, as many home sellers would love a quick sale.

It also removes the financing contingency, giving the seller peace of mind that the transaction will close.

Do Home Buyers Face a Downside in Getting Full Loan Approval?

Home buyers are sometimes hesitant to obtain conditional approval, as they think it could harm their credit rating.

If you shop mortgage rates online or with dozens of different lenders, the sheer number of credit checks could have a negative effect on your score. But speaking with a handful of mortgage lenders and brokers won’t typically affect your credit score.

Consequently, you won’t experience any real downside by seeking a full mortgage approval before starting the house-hunting process.

The professional Realtors® of the Edie Israel team can guide you through the steps necessary to finance a new home purchase, and answer any other questions you may have along the way. We serve real estate clients in Yorba Linda and throughout the Southern California area. Contact us today to learn more about our exclusive resources for home buyers and sellers.

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