You may have already heard the term ‘pre-approval’ or you may even have one. But if you are just starting the buying process or are wondering why they are important, we’ll cover that here.
Obtaining a mortgage pre-approval is one of the first and most important steps when you decide to start the home buying process.
Lenders must gather certain information from you to determine the amount of mortgage that you are pre-approved for. This information includes your income, your debt to income ratio, and your credit score.
Remember that a pre-approval is not a guarantee that you will get a mortgage, but it serves as a great indicator. It is also something that is almost always required to submit an offer on a home. It lets the seller know that you are serious enough about purchasing their home and you have met with a lender who has determined that you have the financial capability to buy their home.
A good loan officer will often want to meet with you to ask you more questions and learn about your specific goals and what loan program is the best fit for you financially and personally. There many types of loan programs designed to meet a variety of needs, and you want to work with a lender that takes some time to explain all your options You should know all your options and not feel like the lender is only pushing a certain product.
Many buyers seem to put off getting a pre-approval, however that can be a mistake. You can start the process with a quick call or online application, and it is also never a bad idea to meet and get to know the lender you’ll be working with.
Do’s and Don’ts of the Pre-Approval Process
DO – Seek out a reputable mortgage lender or better yet, talk to your real estate agent and ask them if they have preferred lenders that they could recommend. Agents deal with different lenders every day. So, we know which mortgage companies and lenders are reliable and which ones aren’t.
DON’T – think that you will look at homes casually and write an offer when you find one you like. In almost every case, the listing agent will require a pre-approval when you submit an offer.
DO – provide your lender with all documentation or paperwork they ask for in a timely manner. Whether you get that dream home may depend on it.
DON’T – begin looking at homes until you have a pre-approval. The last thing anybody wants is to find a home and fall in love with it, then try to get approved and realize it is out of their price range. Or worse you find the home you love, and by time you get a pre-approval to send with your offer, the home has already sold. Just get approved first and then look in both your price range and your comfort range.
A few thoughts from local lender Matt Sitterlet…
“I see a lot of buyers who make the mistake of waiting to obtain a pre-approval until they have already found a home, and this only adds stress to the offer and purchase process. The peace of mind of knowing exactly what you are approved for and what the mortgage will look like will greatly improve the experience of home buying.”
“I also see a lot of buyers who are pre-approved for a product that is not the ideal fit for them, and this is often due to the lack of an in-depth review by a local lender with products best suited for that market. Not all lenders have the same products, so it is important to take the time to interview multiple lenders to ensure you are made aware of all options.”
Matt Sitterlet is a preferred lender for Wesley &. Co. He has helped dozens our clients through the mortgage process and excels at handling challenging situations that big banks or other lenders won’t work with. For more information, his contact info in provided below.
Matt Sitterlet, NMLS 770985
VP- Area Sales Manager
INDEPENDENT BANK
Cell: 734.904.8605 Office: 810.224.5882
Email: msitterlet@ibcp.com
