Looking to buy? Get your pre-approval!

Step one in the buying process: get your pre-approval!!! It's not an option anymore, it is a must, a have-to, a need-it, a cannot-buy-a-house-without-it.

What is a pre-approval? And what is the difference between a pre-approval and a pre-qualification? Why is it important? How do I get it?

Let's break it down...

1. What is a Pre-Approval?

A pre-approval is a letter that you get from your lender that will have:

• Your name on it

• Their name on it

• The type of loan you’re using (Conventional, VA, FHA, etc.)

• How much you are approved to borrow

A “Pre-Qualification” is close, but no cigar. The Pre-qualification is essentially the first step to getting pre-approved. You submit to your lender all of your information (income, debts etc.) and you’ll get a pre-qualification. The pre-approval is essentially the next step. It’s when the lender verifies the information that you sent over with a credit check (and/or other methods) and says "yep, we will finance this loan."

It is always best to get the full pre-approval over the pre-qualification, in today’s market. If you submit an offer with only a pre-qualification, it is essentially not an offer. You haven’t proved that you can really secure the funds to buy it b/c you didn’t go through the full process. Think about it: if you’re the seller and you receive multiple offers, which one are you going to accept? Someone that says they can afford it with a pre-qualification, or someone who has proven that they can buy it with a pre-approval.

2. Why is a Pre-Approval so Important?

How do you know what you can afford if you haven’t been approved? You know your budget, but you might be able to afford a lot more or a lot less than what you initially thought. If we do not know your budget, how do we even know where or what to look for? There may be things that you need to work on with your credit, or a down payment, which means you might not be able to buy for a few months or even until after you submit your taxes.

Second, we cannot submit an offer in today’s market without one. We attach it to your offer and send it over to the seller. The pre-approval lets the sellers know “yep, she’s got the money to back up her offer. She has the money to pay for it.”

I’ll also tell you, as a Realtor, it is REALLY REALLY HARD to want to leave my house (especially in the winter) to go show someone a property when they have not been pre-approved. How do I know that you are serious about buying if you haven’t even taken the first step? It’s actually a pretty quick and painless exercise on your end as the buyer. You submit some documents to your lender and BOOM they shoot you over the golden ticket. What’s more, some properties require you to submit your Pre-Approval to the listing agent BEFORE you can even set up an appointment to go and see it. It’s just such a wild market right now, that everyone wants to make sure that buyers are not wasting time, and it allows sellers to weed out the casual shoppers from the serious buyers.

1. How do I get it?

You will want to use a local lender. Why? They typically have more loan products in their bag, and sometimes even special programs or offers. They’re shopping around for you in order to get a good deal. Plus, the lenders that I work with truly have the hearts of teachers. They are also there to walk you through the process and help you feel educated and empowered to make the best decision. Now, I’ve said it before but I do NOT get any kickbacks from my lenders–I just work with great people who know how to keep the process moving. No one wants to be the reason that a deal falls apart or the process gets held up. At least, the lenders that I work with do not want that.

If you need a pre-approval or a lender–give me a shout, and I can refer you to someone to help.