Around the world, bankers have tightened up their lending processes, which makes it harder and take longer to get approved for loans, including mortgage loans. If you are in the real estate market looking to buy a home, condo, or apartment, having a pre-approval letter in hand is the smart choice.
Here are five reasons having pre-approval is a good idea before you start your house hunting
- Tightened lending standards mean that you will spend a lot more time overcoming hurdles when qualifying for a home loan. Getting pre-approved before you start your house hunt will save you time and heartache.
- You can’t even hope to bid on a foreclosure without a pre-approval letter from a bank. You might miss out on some serious bargains on short sales or foreclosures by having to wait for approval after you have put in an offer.
- Pre-approval means that you know exactly how much house you can afford to buy, which will help you and your real estate agent avoid wasting your time looking for homes that fall outside your budget parameters as well as prevent you from putting in offers on homes you can’t afford.
- Attaching a pre-approval letter to an offer can sway a seller in your direction when you are bidding for a hotly contested property. Not only does it show that you are serious about your offer, but it also shows that you are ahead of other buyers who might have to wait weeks for bank approval, thus slowing the process for an impatient seller.
- Pre-approval signals real estate agents that you won’t be wasting his or her time by being a “looky-loo,” someone who is shopping with no intention or ability to buy.
Believe it or not, getting turned down for pre-approval can also be a benefit, even if you are disappointed about not being able to shop for a home just yet. Your lending officer can tell you why your credit score is low and give you sound advice on bumping it up—paying off debt, getting rid of high-interest credit cards, contesting incorrect information on your credit report, and more. As you work to improve your credit, you’ll be putting yourself into a better financial position. Once you have done the work to improve your credit score, you’ll be able to afford more house and you will probably also have picked up some good financial habits along the way.
Shopping for a home, condo, or apartment in Hong Kong or Singapore? Spacious offers top quality real estate listing services for expats and others hoping to make the move to Hong Kong, Singapore, and other Asian locations. Visit our Home page to get started finding the perfect new home in an exciting new city."
