If you’re in the market to buy a home it’s tempting to call up a REALTOR® and start viewing homes before doing anything else. It’s the excitement of moving forward with your decision, but it can lead to disappointment. You can over spend and not be able to afford the home you love or you can lose out to another buyer because they were more prepared than you.
You might also want to make sure you’ll be comfortable with the monthly payment. Being house rich is one thing, but not having any leisure funds is not so much fun.
How Long Does it Take to Get a Mortgage Approval?
This should never be a long protracted process. Provided you can gather employment details and pay-slips, bank statements, last 2 years tax returns, and other papers showing income and assets, all you need do is contact a loan officer, provide this information and give approval for your credit to be checked. Most loan officers will have your approval amount within 24 hours. Self employed buyers may have to jump through a few more hoops.
The bigger down payment you intend to contribute to the purchase, the more favorably your approval becomes. Credit scores play a large part too.
Once your approval is confirmed you’ll be provided with a letter of pre-approval. This is usually sufficient to start viewing homes and making offers. If you do not buy for 30 days it’s a good idea to have the lender update the pre-approval.
Pre-approval, Pre-qualification or Approval, whats the Difference?
A mortgage approval can only be given once a property has been found, the contract accepted and your lender has carried out all that it needs to including a re-look at your financials and an appraisal of the property. That’s why we ask you for a pre-approval. It’s half the process because you have no property in mind yet. However the credit check and financials are completed.
A pre-qualification is not as strong as a pre-approval and most often will not carry much weight. A property seller wants to be sure you are qualified to buy their property. A pre-qualification is simply asking you for financial information and assessing if you look good for the mortgage you want. If you forget to provide debt and revolving credit information it will have a big impact on your borrowing capability. If your credit is not so good right now, or even if there’s something on your credit that does not belong to you and is negative, you may not qualify at all.
Should You Pay For a Pre-Approval?
Absolutely not. There’s nothing more to say!
Who To Ask For a Pre-Approval
If you have an existing good relationship with your bank, you can start there. You can also seek out reputable loan officers via a REALTOR®. Generally we let go loan officers that do not provide the best service for our clients. The ones we use prove themselves over and over again.
You can respond to many of the radio and TV ads for mortgages if you like. The choice is yours but we prefer our buyers to use a local loan officer and mortgage company. Personal local service can be very handy when things get a little tense. Local loan officers are more likely to be available out of office hours and on weekends.
Why Is a Pre-Approval So Important?
- You can see what you can borrow and how much it will cost to pay back.
- It helps you decide on a budget for your monthly housing payments including mortgage, HOA fees and real estate taxes.
- You may not want to borrow as much as approved for.
- Most sellers are not going to entertain an offer from you without the support of financial approval.
- It gives you an upper limit for your house buying.
- You won’t be wasting time looking at homes that are too high.
- As your buyers agent, you’re showing us you are a committed buyer and not just wasting our time.
Making a real estate purchase with a mortgage is still the most common method. Finding the best loan officer should not be left to chance. We are here to help and can recommend several we trust and who have proven to do an excellent job with just as good service. We encourage you to contact Corinne Guest online or call 1-847-363-3686 to find the best lender for you!