So, feeling ready to buy a new house? Great!
Started looking for good neighborhoods and school districts for your kids? Awesome!
Did you find a Realtor that can advise and help you out? Fantastic!
Do you have a Mortgage Pre-approval Letter from your lender?….Crickets….
This is often the most overlooked aspect by new home buyers, and it is often where the excitement of a new home purchase meets the reality of financial readiness. I cannot stress it enough to my clients: find and talk to a mortgage lender 3 to 6 months before you feel ready for some serious house hunting. Nothing can be done, i.e. no offers on the house of your dreams will be even remotely considered by the seller, without a letter of pre-approval from your mortgage lender. It is basically your financial background check, attesting that you are a bona fide qualified buyer.
A good mortgage lender should take a thorough look at your financial situation, not just crunch some numbers on a calculator during a 15 mins interview. A really good mortgage lender may even setup for you a 3-6 months plan or strategy, to give you a chance to improve whatever metrics are relied upon by the mortgage industry (credit score, debt to income ratio…), so as to get you a better rate or the best mortgage product that fits your needs when it is time for you to make an offer on that very special house.
Most REALTORS® recommend you get a mortgage pre-approval before shopping for a home.