These days, many folks who come to me wanting to start searching for a home, have already talked with a lender. That’s great! If folks haven’t met with a lender, the first thing I do is have them work out how they are going to finance their home purchase (unless they are lucky enough to be able to pay cash).
By getting approved now, you will know exactly what you qualify for (and are comfortable with) before you begin shopping, avoiding uncertainty and disappointment. Sellers will know you are a serious buyer because your financing is already arranged.
Right now, we are experiencing a Seller’s market in some areas, leading to multiple offers and a need for the ability to act quickly. Sellers want to know that the Buyer they go with has financing solidified up front. It’s one more thing working in your favor as a buyer. Submitting a preapproval letter means you, the borrower is fully qualified to purchase the home, subject only to an appraisal and title work.
I recommend talking with several lenders (either a lender at a bank or a mortgage broker that services loans from multiple sources). If you ever need names just let me know. I have folks I’ve worked with whom I trust and count on to provide my clients with excellent service.
When you call to get preapproved you will need:
1. Personal Information –
Names, Addresses, Social security numbers
2. Assets –
Sources of down payment, Bank names and approximate balances, Information regarding stocks, bonds and 401Ks, and other financial assets
3. Debts –
Information about: Credit cards, Car Payment, Installment loans, Alimony and Child Support (if applicable)
4. Income –
Employer information for past two years, Monthly Income, Other Sources of Income (rental, alimony, child support)
When preparing to purchase a home:
DO
Save every pay stub – most of this can be accessed online these days
Save every bank statement (all pages) – most of this can be accessed online these days
Pay every bill on time
Make copies of all checks before depositing them (non-consistent income, gifts, tax refunds, etc.)
DON’T
Bounce any checks
Open any new accounts
Visit automobile lots (where they check credit)
Take cash back from deposits