Why Do You Need A Pre-Approval Letter To Buy A Home?


Buying a Home

Thinking of buying a house? If so, you will need to get a pre-approval letter from the bank (unless you plan on paying with cash). It’s not just something I recommend doing, it’s something you will NEED to do, or you can’t put an offer in on the house you want (or any other house, for that matter)!

This may seem very basic, and it is. But for whatever reason, I sometimes run into a bit of a struggle convincing a buyer that he will need to talk to a lender…and as soon as possible, assuming that he does actually want to purchase a house. So, I’m going to break it down…

There are three major reasons why you need a pre-approval letter, and why it’s important:

  1. How else can you possibly know what you can afford to buy? Sure, you may have a good “ballpark figure” of how much you can afford based on your rent, income, etc…but how do you know that the bank will actually give you that much money, and on terms that are agreeable to you? You don’t. You won’t know until you’ve talked with the lender. So, what are you waiting for?
  2. You might fall in love with something you can’t afford. I’ve seen it happen. The buyer is “completely certain” that she will be able to get a loan to purchase a house in a certain price range, she falls in love with a house, and then she is denied for a loan…from multiple banks. It is NOT easy to get financing these days, so before you fall in love, cover your bases and get your pre-approval letter!
  3. The seller will NOT take your offer seriously (probably won’t even look at it) unless it is accompanied by a pre-approval letter. My policy is that I won’t submit an offer without that letter, and I know plenty of other agents following the same guideline. Why? Try putting yourself in the seller’s shoes. You’re trying to sell your home, your biggest asset, and someone who you don’t know promises that he can get a loan to buy your house. Without having any proof, would you believe him? Would you risk taking your home off the market for possibly weeks just to find out that the buyer couldn’t get a loan after all causing you to waste all kinds of time and money? I wouldn’t, and you wouldn’t either. Submitting an offer on a house without including a pre-approval letter is simply a waste of everyone’s time…including yours!

When you object to talking to a lender, you’re sending a clear message to everyone that you have no real intention of buying a house. So if you’re serious, go get that pre-approval letter!

Not sure where to start? I’d be happy to recommend a few reputable lenders in the Champaign area. I’ll even set up the appointment, if you’d like, and introduce you to the lender myself. I will make this process as easy for you as I possibly can, so long as you’ve shown me you’re serious about buying a home.


Shannon Lewis

Shannon Lewis, Realtor®



Looking for more information on selling or buying a home in the Champaign-Urbana area? Contact me today!



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