Get Pre-Approved To Buy A Home
Mortgage pre-approval for homes is a type of evaluation method used by mortgage lenders to determine if the prospective borrower can financially afford a home loan – and up to how much they can borrow. Pre-approvals do not guarantee that you will get the home loan, but it does allow the borrower to have a good estimate of their potential monthly payment and loan responsibilities.
Although you do not have to be pre-approved to start looking at homes, many sellers prefer to only accept offers from potential buyers who have been pre-approved. Pre-approval for a home loan shows that you are a more serious potential buyer and are closer to being offered a home loan than someone who is not already pre-approved.
Home Loan Pre-Approval Process
You’ll first need to determine who you will be getting the loan from – your bank, a private mortgage lender, or other lender? If you are not sure, we can recommend a mortgage company that we have worked with many times in the past.
Once you do, you’ll sit down with a loan officer and discuss your finances; they’ll ask what income you have coming in and what expenses do you have each month? They’ll also perform a credit check to compare your borrowing history and your debt-to-income ratio. From the general information they gather they will be able to estimate how much their loan company will likely allow you to borrow. This amount is not a guarantee, but it does help you narrow down the types of homes to search for.
The lender will provide a formal pre-approval letter that you can provide to sellers to show you are serious about buying. In the pre-approval letter, it is stated that the lender is allowing the prospective buyer to borrow a particular amount.
How can The Lieberman Team help?
We are part of a professional network consisting of several mortgage and professional lenders – each with excellent customer reviews about them. It is our job as your realtors to help you during the entire process and that includes helping you find a lender, not just a home.
Why the pre-approval process should be done?
There are numerous reasons for this pre-approval process, and one of the most important is that it can make you, the buyer, stand out in a competitive market. It shows the seller that you are a credible buyer and unlikely to back out of the buying process. In some cases, a pre-approval letter is a requirement set by the seller before allowing an offer to be made.