You’ve saved for a down payment. You’ve researched properties on MLS. Maybe you’ve even stopped by an open house or two.
You know in your gut it’s time to buy a home. But what do you do now?
Go get pre-approved.
Is it the least fun part of buying a home? Quite possibly.
But it’s also one of the most critical steps. Because in the end, buying a home is a business transaction, and you should always walk in with the numbers pre-crunched, and financing ready to go.
Having a pre-approval ready beforehand means you know how much you can afford. And if you find a place you really like, it means you can make your move with confidence.
What isn’t a pre-approval
It’s not a guarantee.
It’s an assessment of your finances at the time of the pre-approval, but it’s not a guarantee that you’ll get financing.
Here are a few reasons financing might fall through:
- Financial Changes: For example, if you lose (or quit) your job, take out a new loan, or if you haven’t filed (or paid) your income taxes.
- Home Value: The mortgage is based on the appraised value of the home. If the appraiser says the home is worth much less than you offered, you might not get the financing you want.
- Bad Property: If there’s something wrong with the property, the lender may decline the application, even if you’re a model client. For example, if the home is a former grow-op or is in poor physical condition.
But you know what? It’s actually a good thing.
You can control reason #1 above, so as long as you’re honest with me (or your mortgage agent), you don’t need to stress about that. And if you can’t buy a house because of reasons #2 or #3, it means the lender found something wrong with it during their due diligence and you probably don’t want to buy the home anyway.
What’s involved in a pre-approval?
Here’s everything you can expect to happen, from when you reach out to me to when you actually get keys to the house.
Step 1: Schedule a Call
It takes about 15-20 minutes, and by the end you’re going to have a pretty good sense of how much you can afford. (click here)
Step 2: Get Pre-Approved
You send in a few documents for me to review. At this point I can give you a very accurate estimate of how much you can afford and a mortgage rate. I’ll submit your documents to one of my lender partners to lock in a rate in case the mortgage rates start going up. But don’t worry – if rates go down while you’re looking, we’ll get you the better rate.
Step 3: Go Shopping
Go meet up with your Realtor (I can make an introduction if you’d like) and start shopping for a house. The pre-approval lasts for 60-120 days (depending on the lender), so if enough time passes, the pre-approval might need to be renewed.
Step 4: Get Approved
Pre-approval is a dress rehearsal, this is the real deal. Once you’ve found a property that you want to make an offer on, we’ll send a few more documents to the lender. They’ll verify a few things like your employment and down payment, and likely order an appraisal on the property.
Step 5: Remove Conditions
When you make an offer, the Realtor will add conditions to the offer so you’re not on the hook to buy the house if something goes wrong. This gives you time to get a home inspection and get financing approved. Once all these conditions are satisfied you can remove them, which legally obligates you to buy the house.
Step 6: Meet the Lawyer
About a week before you take ownership of the property, you’ll meet up with the lawyer to go over all the paperwork. The lawyer will take your down payment and communicate with the lender to get all the money to the seller, and transfer property ownership to you.
Step 7: Move in
You’ll meet with your Realtor to get the keys to your new house. What’s next? Anything! The rest of the story is yours to write.
Schedule a time in my calendar to chat. We’ll discuss your goals and put together a plan to help you reach them.