Exton Home Buyer's Guide Tip of the Month Pennsylvania

Now Get Pre-Approved for a Loan

If you are satisfied with what you hear, ask the lender to go ahead and pre-approve you for a loan. Unlike pre-qualification, in which the lender provides a more informal judgment how large a loan you can obtain, pre-approval requires you actually apply for a loan, document assets and debts, go through a credit check. With hot competition among mortgage banker, many will process pre-approvals for the cost of the credit check. Others may charge a few hundred dollars and apply it toward the closing costs.

Pre-approval can improve your bargaining position with the seller. He doesn't have to worry that his house comes off the market only to find out later that you aren't qualified to buy it. “Buyers can often negotiate up to a 5 percent better price with that commitment,” says Glen Spears of Barnett Bank and a leading industry expert.

It's best to obtain advance approval for the highest amount you can borrow whether you chose to go that high.