In any type of market, it is always a great idea to pursue a preapproval from a lender in advance of beginning a home search.
A preapproval verifies the borrower's information and documentation to determine exactly how much the lender would be willing to lend. This is great information to have as a buyer as this allows you to know exactly how much house you can afford. You know up front what your estimated monthly payments will be and can estimate closing costs that may be due. Also, having a preapproval can speed up the underwriting and loan approval process which can help you get into your new home much more quickly.
Another reason that a preapproval is beneficial is that it allows the seller to know that you are a serious buyer. There are many times that a seller will require a preapproval prior to accepting any offer or contract on a home. This is especially true for bank owned properties and short sales. Having your preapproval in hand allows the seller to know they will be working with a qualified buyer during the process. Even if a seller doesn't require it, having a preapproval can separate you from other buyers who haven't taken the initiative to start the lending process.
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