There’s nothing more frustrating than falling in love with a home and then discovering you can’t afford to buy it.
Consulting with a mortgage lender is the first step you should undertake in the home buying process. Almost all first-time buyers need a mortgage to finance their home purchase, so get prepared before you look.
When you’re armed with the knowledge of what you can afford, it focuses your search and allows you to make a move when you find a home you love.
I have a pre-qualification, is that sufficient?
Lenders offer borrowers either a pre-qualification letter or a pre-approval letter, but most REALTORS® recommend you get a pre-approval letter before you start home shopping.
A pre-qualification letter states the amount a lender thinks you’ll be able to borrow based on your income and credit profile without any actual documentation.
A pre-approval letter states the amount a lender says you’ll be able to borrow based on your full documentation and verification of income and assets.
The pre-approval letter provides a much stronger case when you submit an offer to a seller. The seller will treat your offer with sincerity and significance over an offer that has no qualification or a pre-qualification simply because they have no confidence as to whether you can actually afford to purchase the home.
Your home hunt will benefit with a pre-approval for two main reasons:
First, you’ll have completed the credit check and paperwork requirements for a mortgage, so you’ll know your ability to finalize a home purchase. If the lender finds a problem with your credit or an error on your credit report, you’ll have time to fix it before making an offer.
Second, since your documentation will already be in place, a mortgage pre-approval will likely speed up the process once you make an offer.