If you subscribe to my YouTube channel, you’ll notice there’s a series of videos on there detailing the home buying process. The very first video mentions the first step in the home buying process is to speak to a mortgage lender. You’ll need to do it anyways, but it’s best to get it done up front. To summarize, a mortgage pre-approval is a written assurance from a mortgage lender saying you’re able to borrow money to purchase a home up to a certain amount. The approval is based on the income, employment and asset documentation you give the lender at the time of application, along with your credit history. There’s several important reasons why we suggest this be done first.

1. To make sure you can purchase a home.

In order to be able to start the buying process, it makes sense to know you qualify for a mortgage. As stated above, the lender take into account your income, assets, debts, and credit score, among other things, when qualifying you for a loan. If you’re not able to meet the qualification, then the lender may be able to help guide you on the right path to be able to qualify in the future. But before spending yours and the realtors time out looking, you need to know you can qualify.

2. You’ll know the price range you can begin to shop.

This is one of the biggest reasons why we as realtors need you to speak with a mortgage person first. Before realtors spend time setting up searches and showing you homes, we need to know you can afford to purchase a home in such a price range. If you’re only qualified up to $400K, you shouldn’t be searching for homes in the $500K range (unless you have a lot of cash to put down).

3. It makes your offer stronger.

When you finally find your new home, your realtor needs to send over your pre-approval letter to the listing agent. By doing so, you’re proving you’ve already been screened by a lender and they’re determined you can be approved for the amount you need. Offers without these letters carry no weight. Sending the pre-approval carries a lot of weight when trying to purchase, especially when in a market where multiple offers are common.

4. It can save time to close.

What this means is since the mortgage lender has already reviewed certain documents, they won’t need to review them again during the process. This can dramatically cut down on how much time you might need to close, which can make a huge difference when writing up an offer. It may also save you some time trying to find documents all at once by doing them up front.

5. A lot of Realtors won’t work with unqualified buyers.

I can kind of already see the backlash coming for this point, but it’s true. We, as realtors, do spend a lot of time working for our clients. It doesn’t benefit us, or you, to spend time working with someone who hasn’t taken the appropriate steps to ensure they can get a mortgage. Don’t take this as a negative, but you’ll have to do it anyways in order to even make an offer. It definitely benefits you to get it done.

If you’re in the market to buy your new home, and need a mortgage referral, I work with some of the best around. Feel free to contact me TODAY to get started! There are several different kinds of mortgages and mortgage programs. Not every lender does every program, and I would be happy to get you in touch with the right person

Subscribe to my YouTube channel for the Home Buying Process!

You can also get a copy of my Home Buyers Handbook when buying to learn about the process!