Buying a house is probably one of the biggest investments you will ever make. Often, in the excitement and anxiety of taking this huge step, new home buyers are not aware of what is involved in the process and where to begin.
Being a real estate broker, everyday I receive tons of calls from buyers who are interested in my listings, but when I ask them if they are pre-approved, most of the times I get the same answer: “No, we are just getting started.”
The very first step to becoming a homeowner is to get a pre-approval. Pre-approval is an easy process, but it is time-consuming. It usually takes at least one month to get the pre-approval letter in your hands. Then, you will know exactly how much of a house you can qualify for, and the pre-approval letter assures the seller that you are a serious and well-qualified buyer.
You can start with your own bank or any bank or credit union of your choice. You will have to meet them or talk over the phone. The information that all of them want will be exactly the same: Where do you work? What is your job? How long have you been employed in that same line of work? How long have you had your current job? What is your salary? Do you have any other income? How many borrowers will there be? Yourself? Husband and wife? How much do you have saved? What other debts do you have? They all will require a credit report, copy of two years of income tax returns, and recent pay stubs to prove employment and income. They will require this information from every person who will be on the loan.
Once your mortgage broker receives all the information from you, you will know exactly what type of financing, interest rate, and mortgage amount you can qualify for. Then, your mortgage broker will issue you a pre-approval letter summarizing all this information. Your realtor will submit this pre-approval letter with any offers that you will make. Most sellers will not even look at or consider offers that don’t have a pre-approval letter with them. That is why it is crucial to start the pre-approval process as soon as possible. The sooner you start, the more quickly you will be able to make offers and ultimately become a homeowner.