We get this question a lot. Especially when we start working with first time buyers. Many times new buyers are reluctant to get pre-approved because they’re worried that they will get a small hit to their credit score. Or they just aren’t sure that they want to buy something right now so they decide to put it off.
Our advice is to get pre-approved as soon as possible. There are a few reasons for this. Number one is that if you are out looking for homes there’s a good chance you’re going to find something that you fall in love with. And if you do not have your pre-approval letter ready. You may miss out. We’ve seen this happen many times.
Second… While you do get a point or to deducted from your credit score when it is checked, this is not a good enough reason to wait. Pre-approval letters are often good for months. So even if they expire, often lenders do not need to do another credit check. They will just normally ask you a few questions and then you are good to go.
Sometimes people will say “I’ll just get pre-approved once I find a home I want to buy.” The problem with this strategy is that lenders don’t often work on weekends and it may take a few days to get it done. In a competitive market, time is of the essence. Sellers aren’t going to wait for you to get your tax returns into the lender especially if all the other buyers already have.
Third… Getting pre-approved also just gives you an idea about what you can afford. Often times people are surprised at how much house they can buy. It doesn’t mean you necessarily should buy the most expensive house you can afford, but your purchasing power might be bigger than you think.