The Preapproval Advantage
Why Preapproval Is Your Best First Step in Homebuying
Buying a home is one of the biggest financial decisions you'll make, and it's easy to get caught up in the excited scroll through homebuying apps and websites. Before you start touring homes and picturing where your furniture will go, there's one important step that can set you up for success—getting preapproved for a mortgage.
What is Preapproval?
A mortgage preapproval is a lender's conditional commitment to provide you with a loan. A lender will look into your financial situation—reviewing your credit score, income, debt, and assets—to determine how much you qualify for. Keep in mind, unlike prequalification (more of a basic estimate), a preapproval is a stronger indication of your borrowing power.
Why Should You Get Preapproved?
Know What You Can Afford
Without preapproval, it's easy to fall in love with a home outside of your budget. Preapproval gives you a clear understanding of what you can afford, so you can focus your search on homes within your price range.
Stronger Offers in a Competitive Market
In today's real estate market, sellers are often choosing between more than one offer. A preapproval shows sellers that you're a serious buyer with financing already lined up, making your offer more competitive. In some cases, it can even give you an edge over other buyers who haven't taken this step but are offering a higher amount for the home.
Faster and Smoother Closing Process
Since much of the financial review happens during preapproval, the loan process moves quicker once you find a home. Not only does this help reduce stress, it makes closing smoother, with fewer surprises along the way.
Identify and Address Potential Issues Early
If there are any red flags in your financial profile—such as a low credit score or high debt-to-income ratio, preapproval gives you time to address them before you're under contract for a home.
How to Get Preapproved
If you're in the market for a new home, set yourself up for success by setting a clear budget, strengthening your offer, and making the buying process smoother with a mortgage preapproval! Our mortgage experts are here to help— stop into your local branch, give us a call at 616-261-5657 (option 2), or send an email to MortgageTeam@communitywestcu.org to get on the fast track to preapproval (and homeownership!)