Getting Preapproved for a loan necessary?

[Peter Bui]

Hey everyone, So I have been talking to a few real estate agents and the first question they always ask is if I have gotten preapproved for a loan. Is this a necessary step I need to take before purchasing a home? Here is the case: I am looking to purchase an investment property but am in no rush. If I bought one at the end of next year, I wouldn’t mind. So if I got preapproved for a loan right now and I don’t buy a property within 4 months, it will expire and I would have lowered my credit score for nothing? Just curious on your guys’ thought on my process and how you guys usually run it.. should I be more committed and purchase a home within the 4 months? I definitely have the down payment for my next property and I have a good amount of income from my job to be paying the mortgage, would you advise me to get preapproved anyways ? And the same question except on the opposite spectrum. If I do find a property and I haven’t gotten preapproved, that’s what I will have to worry about during escrow correct, getting an actual approved loan? Thanks in advanced Peter

[Wayne Brooks]

If you don't get preapproved, an agent knows you aren't serious about buying a property.  And no agent will likely be willing to show you properties now, when "you may buy one in a year".  The ding, 4-5 points on your credit score, is only temporary.  If you want to buy a property, absolutely get a preapproval, a Real one.....where you have to submit tax returns, w-2's, bank statements, etc.

You don't really know what ou can buy until you get one.  Also, sellers usually won't even consider an offer without at least a preapproval in place.