The Real Estate Browser Volume 8, Issue 14 | Page 14
14 — Say you saw it in The Real Estate Browser of Lynchburg — Volume 8 Number 14
www.LynchburgRealEstateBrowser.com
Pre-Approved to Buy? Why Bother?
By Sherry Brady, NMLS 217258, Branch Manager,
Summit Mortgage Corporation
One of the first things you need to do once you
decide you want to think about buying a home
is to talk to a lender and get pre-approved for a
mortgage loan to buy a home. Even if you don’t
think you’re seriously looking yet, meeting with a
lender will help you determine what your options
are. A lender can help you determine such
things as: what types of loans and how much
you will qualify for, what will your monthly pay-
ment be, will you have to make a down payment,
what are the closing costs, and how long will the
process take...just to name a few. By talking to a
lender, you’ll get the answers to these and many
other questions that will allow you to shop for
your home with confidence, and less stress!
Why is it so important to get pre-approved
before you find a home you like or even go to the
first “Open House”? Because once you open that
door and start looking at homes, you never know
at what point your dream home is going to find
you. You could look for months, or it could be
the very first house you walk into that turns out
to be “the one”. Once that happens, you’re going
to want to put an offer in on the home as soon as
possible so that you don’t risk losing it. That’s
when you Realtor is going to ask for the letter
saying you’re pre-approved for a mortgage loan -
if they haven’t already asked. This is where you
could have a challenge if you haven’t talked to a
lender in advance. If you have great credit and
have found a home in a price range that fits your
budget, you’ll be able to get the letter you need
fairly quickly, but if you have any credit challeng-
es, or have overshot the budget, the process could
take much longer, and you may not even be able
to qualify for that priced home.
Even if you already know that you have the
credit scores and financial ability to buy a home,
working with a lender – especially a local lender
– can help you determine what you projected
new monthly payment will be and help you to
be certain it fits within the budget. Nine times
out of ten, monthly payments that you see online
for homes are inaccurate because they are based
on a set of criteria that may not represent you.
Common assumptions for online payment quotes
are: credit scores above 740, at least 20% down
payment, and no escrows for taxes or home-
owner’s insurance. This is an unrealistic pay-
ment quote. Very few people put 20% down,
and whether you have the real estate taxes and
homeowner’s insurance built into your monthly
payment (escrows) or not, you still have to pay
those things, so you need to consider the cost of
them. Working with a local lender can help you
determine the true monthly cost of your housing.
Having a pre-approval tells both your realtor
and the seller of the home you wish to buy that
you are serious – not only do you want to buy,
but you have the financial ability to buy. And
by getting pre-approved, we can begin your loan
approval process early, before you find the house,
so that once you find the home you love you’ll
be able to get to closing quicker! Call us or a
local lender today to get on the road to your new
home!