Foreclosed Home For Sale Investing – The Advantages of Loan Preapproval

If you have decided to buy a foreclosed home for sale, you must be aware that getting preapproved even before shopping for a property is a crucial step in buying foreclosures. Here are the top reasons why sellers are more inclined to entertain offers from potential buyers who have been preapproved.

Increases Your Chances of Winning

A preapproved loan means that you have consulted with a lender who has approved your mortgage loan for properties that fall within a price range. Sellers know that by getting preapproved, you have submitted yourself to a thorough process of credit checking and evaluation. This can positively increase your chances of getting favorable results from the bank or lending institution as they are most likely to deem you qualified to take out a loan for a particular property.

When you submit your preapproval letter to the bank, you are, in fact, telling them that you are worthy of credit and that there is nothing in your financial history that could give them the idea that you will later on default on your payment. It helps them assess your financial situation by looking at your credit report and standing. A loan preapproval indicates a level of determination on your part to push through with the sales transaction, one that is always highly appreciated by credit assessors.

Saves You Valuable Time

When you know that you have been preapproved for a certain amount, you can then focus your search for those properties that are just within your approved purchase capacity. This allows you to save valuable time when looking for a foreclosed home for sale. A loan preapproval enables you to utilize your search time wisely and points you to a more specific direction. It also helps you to look at your buying options realistically since you already know which properties you can only afford.

Gives You an Edge in Bargaining

Because sellers know that you have already been preapproved, they are more likely to view you with a certain level of confidence and trust that you can deliver the purchase money required for a particular property. They will react positively to your offers since they know that they are dealing with a trustworthy person who has a proven record of credit worthiness.

Moreover, a loan preapproval equips you with a tool for negotiation as lenders are typically more willing to deal with persons who have proven reliability in terms of their financial standing. When buying a foreclosed home for sale, a loan preapproval can tilt the negotiating table to your favor.