I know the title of this post doesn’t sound exciting at all, so I’m going to try my best to keep you intrigued on this very important topic!
Now in days being pre-approved for a loan is one of the most important factors when purchasing a home. Over the last few decades’ things in the real estate world have changed when it comes to buying or selling a home. Those simple old school ways, I can almost guarantee, unfortunately, will not work in the market we live in now. Way back in the days you were able to pick a realtor you trusted, shopped around and eventually find a home you loved. Once you found the perfect home then you made an offer on it and lastly, then you went to the bank and got a loan for the home. The market is moving so much faster now in days with technology being right in front of us and home transactions are happening in the blink of an eye. That being said, that is why it is highly recommend that all types of buyers speak first to a preferred lender and receive a pre-approval letter prior to shopping for their new home.
There are three levels to being approved for a home.
1.) Prequalification – Prequalification is the first step a buyer will take when thinking about buying a home, but they not quite ready to fill out an application. This usually will start with a 30-minute call between the buyer and the lender. The lender will review the buyer’s opinions of their home price range and estimated closing costs based on non-verified information the buyer has provided the lender.
2.) Priority Buyer Preapproval – This is one step closer to the buyer feeling ready to buy a home. The lender will have the buyer fill out a mortgage application. After review they will run a credit check and initial the underwriting review. The lender will then give the client an estimate of their home price range base on the initial review of their application, an automated underwriting review, and limited credit information only.
3.) Credit Approval – Then lender gives the client an estimated loan amount based on the initial underwriter review of their credit and the financial information they provide in their documentation. Having a letter from the lender is the highest standard of credit approval.
There are different loans and programs that a lender will provide you with, but a good lender will find the perfect program that fits best just for you! See that wasn’t so bad! I can express enough how important this process is. This will be the first thing you discuss with your realtor (hopefully me) when you chat in a buyer get together meeting!
Not Your Regular Realtor