Joke of the day…
Real Estate Agent: Who’s there?
Real Estate Agent: Nunya who?!
Buyer: Nunya business if I’m pre-approved or not! Just show me the house, and I’ll get pre-approved, if I even like the house. I can definitely get approved for a mortgage for probably way more than this stupid house, anyway. So, stop asking if I’m pre-approved.(By: Lighter Side of Real Estate)
You may or may not have had this experience (just yet), but the truth is that there is a legitimate reason (or two) that real estate professionals need to know whether or not you’re pre-approved to purchase a home.
To begin, you absolutely need to know is what your “purchasing power.” Unless you have the cash to purchase a home in full, you need to know what a financial institution is willing to lend you. Lenders use certain criteria to establish your creditworthiness and loan limits. Obtaining a pre-approval is necessary to determine how much you can spend on your purchase. And as your real estate professional, I need to know so that I may advise you accordingly.
But beware! Just because the bank provided you with a piece of paper that says you’ve pre-qualified for a $400,000 loan does not mean they will ultimately approve you. It also does NOT mean that you SHOULD spend $400,000 in purchasing a home! As an honest and experienced real estate professional, I can (and will) tell you what all of that means and how it will play into your purchase price, your future mortgage payments and overall cost of living.
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