This is why you need to get preapproval for a loan. For a large purchase, such as a home or car, preapproval is crucial before you start shopping. Your preapproval will shorten the loan process significantly when you’re ready to take out the loan. However, that is only a small benefit of getting preapproved before you start “shopping.”
Here are some other key advantages of getting a preapproval:
Having this information in hand will simplify your search and help you avoid disappointment later. When determining the amount of money you'll need to shell out each month, be sure to calculate other monthly costs, such as property taxes, home insurance, and increased auto insurance rates.
When you’re unsure how much you can spend on a car, the dealer will capitalize on your uncertainty by trying to sell you a car that barely skims the maximum amount you’ve told them you could afford.
They may also focus only on a monthly amount you can afford. Then, the dealership will try to inflate the payment with unnecessary charges only because they fit within your named payment amount.
In contrast, when you show the dealer your preapproval letter, they must show you cars with price tags that fit within your loan amount.
A car dealer will take you more seriously when you walk in with a preapproval. Having that information in hand shows you’re ready to buy. Likewise, when purchasing a home, a real estate agent will assist you more efficiently when you know exactly how much house you can afford. They’ll also give you better service since you show you’re serious about buying a home. Unfortunately, many realtors will only work with buyers who’ve obtained preapproval.
When you show up at the car dealership with a preapproval from Elevate Credit Union, you know the deal is in your best interest. Many dealers have access to several financing options, and they’re almost always going to offer you options in their best interests.
A preapproval helps you stand out from the pack. If you’re house-hunting in a competitive market, having your preapproval will give you a leg up on bidding wars. A seller will be more eager to work with someone who’s already started the mortgage process.
Now you know why you need to get preapproval on a big loan. Are you ready to get started? Are you in the market for a new home or car? Don’t forget to call, click, or stop by Elevate Credit Union to hear about our fantastic rates on mortgage and auto loans!