You will approach your house hunting more confidently, and be seen as more serious by both a buyers agent or sellers agent. You will make offers and approach negotiations with more confidence. Sellers will view you favorably.
It's a win-win for all. Good Luck to you.
First, unless a buyer goes â€œcredit crazyâ€ and has their credit pulled by several sources, mortgage or otherwise, 2 mortgage credit pulls alone will NOT adversely affect their credit score.
Second, if you read my entire answer, I clearly said that is whatâ€™s going on in MY market. Could be different in yours and both of ours could be different than every other agent on hereâ€¦. In my market, thatâ€™s what weâ€™re doing because this is a new day in the mortgage industry and no one wants to get a day or two from closing and â€œpoofâ€ have no loan program. No loan = no sale for the sellers = no new house for the buyers = no paycheck for the rest of us. Youâ€™d better believe weâ€™re being cautious! Buyers, sellers, and agents alike.
Third, my information comes straight from the horseâ€™s mouth; we are learning these things from the local branch of a national lender, and our in-house lender backs this process.
You know, itâ€™s entirely possible that I, most realtors in my area, and national lenders are way off base about the whole thing, but, then, you think a pre-approval letter, in this mortgage climate, is good for 3 monthsâ€¦.
The real estate market is in a very different environment right now. Gone are the days that a pre-approval letter is good for months and buyers were in a â€œbetterâ€ position with one. The mortgage crisis has created a climate where not only should you have one, you must have two! And a pre-approval letter that is more than a week old is almost worthless today. The reason is that mortgage companies are cutting loan programs left and right and even people with good credit are finding that the loan they got pre-approved for a couple of weeks ago is no longer available. Whether they qualify for another program will mostly depend on if they are no-doc or low-doc; if that is the only way they previously qualified to go, no more mortgage loan for them!
In my market we are telling our buyers to not only get pre-approved, but get pre-approved through two different reputable lenders, and we are advising our sellers to request that the buyer be double pre-approved and to ask questions to find out what and how many hoops the buyer needs to jump through to actually make it to the closing table BEFORE accepting an offer.
It is a crazy mortgage climate we are in right now, but still very much a buyerâ€™s market in much of the country. If you take care of your stuff (your hoops) on the front end, get pre-approved through two reputable lenders, and start looking, selling agents will take you very seriously and you will have a strong position to bargain for an even better deal.
Happy hunting! ~Kathleen
By all means get pre-approved so you know exactly where you are financially and seller and ther Realtors will know you mean business. When you submit you offer the Realtor will require your preapproval with the offer upon presentation. Offer that come in without preapproval are not take very serious. Good luck.
Pre-approval for a loan should be sought once you have all your ducks in a row. Are you ready to start looking in earnest? If you are just testing the waters you are wasting your time.
Usually, if a lender pre-approves you - they will "lock you in" on an interest rate for a specific amount of time. Although this isn't in all cases - sometimes they just hand you a letter and say - yup, you're preapproved - this doesn't usually mean anything until the "lock in" phase.
So, wait until you are ready - then by all means get pre approved and get cracking!