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Shopping for a home before talking to a mortgage lender is the equivalent of walking into a grocery store without a wallet. Yet, many home buyers don’t get their finances in order before going house hunting. Why does this matter? Well for one … how do you know how much you can buy? How do you know how much your payments are? How do you know how much you need for down payment and closing fees? Do you even know you can get a loan ? Wouldn’t it be more fun to shop if you knew you could get a loan?

Pre-qual vs Pre-approval:

Pre-qualification: The lender relies on information provided by the buyer to estimate how much the borrower could qualify for.
Pre-approval: The lender verifies the borrower’s information and documentation to determine exactly how much it would be willing to lend to that borrower.

The documents to get pre-approved are the same documents that you would need to get a mortgage

Documents like:

  • Pay stubs.
  • Last two years’ W-2s.
  • Last two years federal tax returns.
  • Two months’ worth of bank statements of all types of accounts.

A pre-approval is not a loan commitment, but it helps speed up the underwriting and loan approval process

Here are 7 reasons it’s better to get a mortgage pre-approval before you go house hunting.

    1. The competitive market

Often a pre-approval that can close faster than other homes, might get you a better price, or outweigh other offers or beat out multiple offers on the home you are looking at.

    1. No pre-approval, no accepted offer

Most sellers and real estate professionals will not accept offers that do not have a pre-qual or pre-approval letter with them. They just flat out reject them.

    1. You need to know where you stand

Buyers need to know they are shopping in the right price range, have enough down, and can afford or want to make the mortgage payment. You need to speak to a lender to make sure you have these numbers before shopping.

    1. Make a plan

Getting pre-approved before you shop for a loan also allows buyers time to fix unexpected errors on their credit reports, and bring up their credit score.

    1. It could increase your negotiating power.

In addition to strengthening your offer when compared to buyers who haven’t taken this step, getting pre-approved may give you the upper hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone they’ve been assured is financially capable of purchasing their home.

    1. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contract to close — this way you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

    1. Without it, most agents won’t work with you.

Makes sense, too. Right? Think about it: when you hire an agent, he/she will invest countless hours showing you homes over the course of your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?

Apply now, with one of our preferred lenders, it takes less than 15 mins, and you will have a pre-qualification in under 24 hours.  Plum Creek Funding, and Stacey Sandlin NMLS#1645881,  is one of our preferred lenders click below to apply.

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