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Step 3: Get Loan Pre-Approval

Posted by: raindrop 5 years, 11 months ago

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Since few people can buy a home for cash, getting a loan is an integral part of the home buying process.

We recommend that Buyers shop for a loan prior to making offers on properties, so that they know exactly what they qualify for, and what your actual costs will be.  Additionally, once you're pre-approved, you are in a much stronger buying position.

What is it?

"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 a pre-approval?

When we meet to discuss the home buying process, we will provide you with a list of preferred partners, whom we have worked with and recommend.  You may also want to speak with your local bank or credit union, with whom you already have a relationship with.
 
When you meet the loan officer, they willl carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs.
 

Once you're pre-approved, you're ready for Step 4: Look at Homes.

 
For more Information, click here or contact Kate Gillingham.

 

Information provided courtesy of Realtor.com.

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