Is there any reason to get preapproved for a loan?

For a big purchase like a house or a car, having that preapproval before you start shopping is super important. A preapproval is a letter from a lender saying how much of a loan you can get. It’ll also tell you how much interest you’ll pay.

Here are some other cool things about getting preapproved:

1.) You’ll know exactly how much you can afford

Having this info will make your search easier and help you avoid disappointment later. Just remember to add in other monthly costs like property taxes, home insurance, and car insurance when figuring out how much you need to spend each month.

2.) Don’t get taken advantage of

When you’re not sure how much you can spend on a car, the dealer will try to sell you a car that’s just barely within your budget.
They might only focus on how much you can afford to pay each month. Then, they’ll try to add extra charges and fees just because they can.
But if you show the dealer your preapproval letter, they’ll have to show you cars with price tags that fit within your loan amount.

3.) Dealers will take you more seriously

A car dealer will treat you more seriously when you have a preapproval. They’ll know you’re ready to buy and will be more helpful. When you buy a house, a realtor will be able to help you better when you know exactly how much house you can afford. They’ll also give you better service since you’re showing that you’re serious about buying a house. In fact, many realtors won’t work with buyers who haven’t gotten preapproved.

4.) You’ll know you have a reliable lender

Getting preapproved is a great way to make sure you have a reliable lender who can help you get the best possible loan terms.

When you walk into a car dealership with a preapproval letter from your credit union, you know you’re in the driver’s seat. Many dealers have a bunch of financing options, and they’re usually going to offer you the best deals for themselves.

Now, let’s talk about buying your dream home. Having a preapproval gives you an edge in a competitive market. Sellers are more likely to work with someone who’s already started the mortgage process. Plus, it shows that you’re serious about buying a home.

If you’re in the market for a new home or car, don’t forget to call, click, or stop by SIU Credit Union to hear about our amazing rates on mortgage and auto loans!

Sources:
http://www.investopedia.com/mortgage/pre-approval/
https://www.nerdwallet.com/blog/loans/advantages-of-getting-pre-approved-for-a-car-loan/
https://www.google.com/amp/s/www.zillow.com/mortgage-learning/pre-approval/amp/