Obtaining a Mortgage Loan
Qualify before you buy:
I routinely suggest that consumers start the mortgage process well before bidding on a home. By meeting with lenders either online or face to face and looking at loan options, you will find which programs best meet your needs and how much you can afford. I also recommend pre-approvals for another reason: Purchase forms often require buyers to apply for financing within a given time period, in many cases, seven to 10 days. By meeting with loan officers in advance and identifying mortgage programs, it won't be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option.
"Pre-approval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.
Although not a final loan commitment, the pre-approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.
How do you get pre-approved?
Real estate financing is available from numerous sources, including lenders on this site, mortgage companies that have worked with local Realtors and in some cases, banks. I may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms.
