If you have been looking at homes to buy and you have yet to go through the process of getting pre-approved by a lender, you are wasting time! Outside of picking the realtor you want to work with, getting pre-approved for a mortgage is one of the very first steps you should take when looking to buy.
What is a pre-approval letter? A pre-approval letter comes from the bank and will show potential sellers that you have been pre-approved to purchase their home, up to a certain price. The bank has done a deep dive into your financials, checked your credit, looked into your other debt, your income, etc, and has determined you would qualify for the loan. ** NOTE a pre-approval is NOT a full on commitment from the bank. There are still other steps you will need to take before getting a full, 100% commitment from the bank.
So why do this before you start looking at homes? Two reasons:
Having this letter will help you be prepared when you finally walk into the home of your dreams. When you finally find “the one” you will need to send your pre-approval letter, along with offer paperwork, to the seller/seller’s agent. If you can not show a letter from a bank when you offer, it is unlikely the seller will consider you qualified or serious.
The pre-approval process will help determine what price range you can afford. Imagine you spent a month looking at homes up to $750,000 only to find out from the bank they won’t qualify you over $600,000? You just wasted that entire month of your search!
If you feel like you want to buy a home within the next 4-6 months and need help finding a lender to speak with, feel free to reach out to our team, we have plenty of great lenders that we work with and would be happy to make a recommendation!