Many buyers call their lender seeking information about financing. In the process, they become pre-qualified. That gives them a good idea of what they can afford, or more accurately, what loan amount they qualify for. You should take it one step further, however, and ask to be pre-approved. When you become pre-approved, you actually apply for a loan. The lender checks credit, verifies employment, and often verifies that you have sufficient funds to close. Then once you find your dream home, just about the only thing left is the appraisal.

Pre-approval can be a very valuable step towards purchasing a home. By completing your mortgage application prior to choosing a home, you can get a pre-approval letter stating how much home you can afford. Your pre-approval letter lets you know exactly how much you can spend, and it shows home sellers and real estate agents that you're serious about buying a home. This may give you leverage in the negotiation process. Many sellers actually prefer to work with pre-approved buyers, especially in hot real estate markets.

Lenders come in various sizes, organizational structures and degrees of complexity. There are banks, mortgage companies and brokers.  All of these can provide you with the pre-approval letter, but not all have loans that will fit your specific needs. You should always check with several lenders to compare their mortgage rates and financial programs and options. The loan process can be complicated so do not hesitate to ask a lot of questions.

To find a mortgage professional and get started with your pre-qualification or pre-approval for a loan, or if you have any questions about pre-approval, please call or email me. I will by happy to provide you with a list of proven lenders in our area.
 

Mortgage 101 by Daniela Wilburn With over 175 informative documents and interactive tools, Mortgage 101 can help you find the answers to your mortgage questions. View current interest rates, sign up for a monthly newsletter, use interactive calculators and more.