This commitment from us can be done even without a property under contract. First, it provides you with the security of knowing your loan is in place. All you have to do is find a property which meets the approval specifications. There is no guesswork. More importantly, Preapproval also provides you with a very strong negotiation tool.
Sellers are more motivated to deal with a buyer who is serious.
They know that if the terms of your contract can be agreed upon and if the property passes inspection, the transaction will close. It has also been proven that you can negotiate a lower price if you have a preapproval. You have the option to lock into an interest rate anytime during the loan process. If the loan does not close and fund within the lock term, you will close at a higher rate. If rates decline, you close at the locked in rate.