Why the Pre-Approval is so Important

A few words about a really important part of the process of buying a home – getting pre-approved for a mortgage.

Being pre-approved for a mortgage can give you a crucial advantage as a buyer. Because it assures the seller that you’re ready and able to purchase the home and it sets you apart from other potential buyers who might be just looking. It’s also wonderful in a competitive environment. Because if you’re pre-approved and your competition isn’t, chances are you would get the house. And even when you are at the very beginning stage of house hunting, being pre-approved is important then too. Because if you see a house for X number of dollars for sale, you’ll know right away if you can afford it or not. There’s nothing worse than looking at a place and wanting it really badly only to find out later it’s out of your price range. Being pre-approved can help avoid all that disappointment.

You really have nothing to lose here. Getting a pre-approval from a lender is easy and it can often be done in just a few hours. But make sure you’re being pre-approved and not pre-qualified. Because pre-qualification, that doesn’t really count. Pre-approval is what you want. It’s an extremely detailed process that examines your financial picture in-depth. Your bank statements, pay stubs, tax returns, and information about other loans you might have. They’ll look at your credit card balances, and your credit report. Once your lender has all the facts they’ll determine in writing how much you’ll be eligible to borrow when you buy a home.

So what’s it take to be pre-approved for a mortgage? Well, a decent credit score and a decent credit report to start. You’ll also need enough money in the bank for at least a 3% down payment, another 3% to 4% for closing costs and enough left over to cover the mortgage and other bills for at least two months. As far as income goes, you’ll need to make enough money to comfortably afford the home you want to buy. If there’s a problem and you’re not approved, that could actually help you. Because the lender will tell you why. Like maybe your credit card balances are too high. And that tells you what you have to work on before you do purchase a house.

But assuming you are approved, you’ll end up wth a letter. That letter will accompany every offer you make and tell the seller you’re ready to do the deal.

So how do you begin? You call your REALTOR today and get a few names of trusted mortgage experts. And if you’re thinking “Hey, I’ll just wait until the spring market to get pre-approved”. Well guess what, the spring market starts in less than one month. So if you want to buy this spring, it’s smart to get pre-approved this winter (what’s left of it). You’ll be ready to go when many more for-sale signs start to pop up on lawns all across San Antonio.

 

 

 

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