Investing in a home can be an exciting process. Unfortunately, securing your dream home might not be as easy as you had hoped. Competition for affordable properties is usually high, so potential buyers looking to score a great deal should expect to be just one of many offers submitted on the property in question.
Cash offers are typically most attractive to sellers because they are a guarantee. If you don't have the financial resources needed to pay the full purchase price of a home in cash, you can use full loan approval as a viable alternative.
What is full loan approval?
To understand the benefits of full loan approval, you need to understand what a full loan approval is.
Many steps are required to secure financing for a residential real estate purchase. Prequalification lets buyers know how much they can afford to spend. Preapproval validates that the buyer is eligible for financing. Underwriting is the process of verifying all information provided by the buyer to determine the specifics of the loan.
Full loan approval occurs when the underwriting process is complete.
Why is a full loan approval beneficial?
The reason that you want to submit an offer with full loan approval is because these types of offers can act almost the same as a cash offer. Sellers typically want to complete real estate transactions as quickly as possible. Cash offers are attractive when time is of the essence because there is no need to wait to close once an offer is accepted.
The delay in closing that occurs when a real estate purchase is being financed is a result of the underwriting process. Verifying all information on a mortgage application can take time.
When you have completed this process already and have full loan approval, you can close immediately if a seller accepts your offer. This can make your offer more attractive to a seller and increase your chances of beating out any other offers submitted on the same property.
To purchase the property of your dreams in a competitive seller's market, you will need to leverage your buying power. You might not have the cash resources to make a cash offer, but you can take the time to obtain a full loan approval before you attempt to make a real estate purchase.
Full approval residential loans let you submit a strong offer that will be attractive to a seller. Talk to your mortgage officer about the potential for full loan approval before you begin your search for the perfect home.Share