Knowledge is power!! It amazes me that people constantly want to put the cart before the horse, especially when it comes to making their biggest investment. Buyers don’t know what they don’t know.
When it comes to purchasing a home, the pre-approval process is the first and most important step (along with finding the right Realtor).

So many buyers want to go out and start looking at homes as the first step. They figure they will get preapproved after they find the right home. In many situations, they end up finding out that they qualify for less money than they thought. This can happen for a number of different reasons. Their credit score is lower than they quoted or their debt to income ratio is higher than anticipated.

There are countless reasons a buyer may not qualify or may need some time to qualify for the home they ultimately want. The pre-approval process is designed for this reason and should not be feared. Here is what to expect for the pre-approval process. It usually consists of a 15-30 minute phone call to a mortgage lender. The lender will ask you questions which you answer (truthfully)! These questions
consist of; What is your income? What are your monthly expenses? What is your job history etc. From there they will ask to pull your credit.

The reason for pulling your credit is to see what “tear” you fall into. The tear establishes the interest rate you will receive. They also look to make sure you are on time with your payments. It also shows them that you have established credit and/or have enough credit to warrant a mortgage. In some cases, the lender will find problems on your credit report. They are not here to judge you!! They can actually help you with solutions to the problems. This will help your credit score and save you thousands of dollars over the next 30 years!

Ultimately, the goal is to set yourself up with a plan to buy a home. This plan starts with the pre-approval process. Again, do not be afraid of this. Go into the process with the mindset that this will save you time and money. Focus on the excitement that you are taking the first step towards home ownership!