Talking to a Mortgage Lender is a Must!

The first step in the home buying process is getting pre-approved by a lender. As a REALTOR, I am here to work with you, support you and guide you through the buying process. But you need a lender to qualify you for the amount to buy the house. These are ways a lender will make your life easier!

  1. A lender will save you (and others) precious time. They will tell you what loan amount you qualify for. Don’t waste your time, your REALTORS time, or the Sellers time looking at homes that are not in your price range. Knowing what you qualify for will also save yourself from unnecessary disappointment. (Looking too high– You will get your heart broken when you find the perfect home and find out you cannot afford it. You’ll then compare all lessor priced homes to “the one you lost”. This will make you miserable through the process of finding one in your correct price range. Looking too low– Again, you’ve really just wasted everyone’s time, and meanwhile the perfect house, that was in your price range, is under contract).
  2. A lender will get you pre-approved. In today’s market, if your Offer to Purchase is not submitted with a pre-approval letter, the sellers are moving on to the next offer. Be prepared!
  3. A lender will save you money. You find the house of your dreams, make an offer and then find out you don’t qualify for the loan. You lose your Due Diligence money! You’re out cash and the house of your dreams.
  4. You need a lender even if you’re rolling in the dough. If your investment account is bulging, you will still need to qualify for the loan (unless you’re paying cash). Lenders look at credit scores, debt to income ratios, factors that tell them whether you will be able to make the monthly payments on the loan.
  5. A lender can keep you from being “house poor”. No one wants all their money to go towards a house payment every month. A lender will let you know what your monthly payments will be, which is the real magic number.
  6. Lenders will help you set goals. After talking to the lender, you find out that you cannot qualify for the amount you want. Lenders will educate you and suggest steps to get you in a financial position to purchase in the future.

And don’t just speak to one lender, shop around, this is an acceptable thing to do. Each lender offers different programs, search out the one that makes the best sense for your budget. It doesn’t take a lot of time to get pre-approved, you can start with a phone call. There are so many reasons to do it, and not one that you shouldn’t.

Pre-qualification? Pre-approval? It can be confusing. Here is the difference between the two:

Pre-qualification letter means that a lender has evaluated your creditworthiness and has decided that you probably will be eligible for a loan up to a certain amount. This is all based upon the information you give them, this can be done over the phone.

Pre-approval letter is the real deal. It is a statement from a lender that you qualify for a specific mortgage amount based on an underwriter’s review of all of your financial information: credit report, pay stubs, bank statement, salary, assets, and obligations.