Have you ever purchased something online, and when it shows up at your door a few days later, thought to yourself, wow, that was easy and painless?! Well, buying a home isn’t that easy. It’s a process and it involves a lot of moving parts. Before you start to shop, you need to make sure that you qualify for a loan and know your budget. This is where the importance of getting a pre-approval comes in. Without one, no good real estate agent will work seriously with you, and no seller will accept an offer you make to purchase their home. Lucky for you, you're in the right place: in this post, I'll outline 4 things you should know about a pre-approval, including how to get one!
A pre-approval is based on three basic things: Income, Assets and Credit. You must supply supporting documentation on each of these three items above for a true pre-approval. Among other things, pay stubs, W-2’s and Asset Statements are a few of the basic items needed. Your loan originator will also request information to pull your credit.
Finding the right home can take time, so you definitely want to make sure you're aware of the timeframe during which you pre-approval letter is valid. You'll be happy to learn that a pre-approval is typically good for 60 days, giving you two months to find the best home for you. After that point, a new credit report will need to be run, and you will need to send updated pay stubs and asset statements.
As you may have guessed, the pre-approval process should be completed BEFORE you start looking at homes. This helps to eliminate the disappointment of finding the perfect home only to discover that you don’t qualify for it, or that you do qualify, but you can’t get a pre-approval letter in time to compete with other offers. Don’t let this be you! Be prepared!
There really is no such thing as casually shopping when it comes to buying a home. Getting a pre-approval allows you to avoid the disappointment of missing out on your dream home, giving you a clear idea of how much you can afford and boosting your negotiation power. Ready to begin the pre-approval process? Start here.
Not sure if you're ready to get pre-approved quite yet? Not a problem, feel free to spend some time playing with our mortgage calculators, download my mortgage app or request a copy of our new homebuyers guide.