1. Get Pre-Approved
Getting ready to buy your home is just as important as finding the right home! One of the first steps that we always recommend is to meet with a lender and get pre-approved for a home loan.
It is also important when it comes to putting in an offer. In the current market, multiple offers are not uncommon. Occasionally, the listing agent may reach out to the lender to inquire whether the buyer has been fully approved or just pre-qualified to help that it is solid financially.
What is the difference between pre-qualifying and pre-approval? A pre-approval will mean that you will go through a full application process with your lender. They will likely need your social security number, W-2’s, assets, and credit information to help determine the right price range for you and your estimated interest rate.
A pre-qualification generally is just from information that you would tell a lender without verification. While this sometimes can be accurate, it does not go through the process of making sure there isn’t something that would alter your amounts. i.e. outstanding credit issues, other loans that may alter borrowing power, etc. The danger here is that you could put an offer a house, have it accepted, and then potentially have the sale fall apart because you find that you cannot actually afford it after going through the approval process. This leaves everyone heartbroken and frustrated!
How do I know which lender to work with? We recommend reaching out to at least a couple lenders to ensure that they are the right fit for you. This can even just be a phone call to chat for a few minutes to get a feel of personality style. We have a couple of lenders on our preferred vendors page that past customers have used and had a great experience with. Keep in mind, that if you know someone you certainly can and should work with them if you choose to!