Why you need to be pre-approved before you find your dream home

If buying a house has a step 1A, it would be to save up and prepare your finances (down payment, closing costs, credit score etc). Step 1B would then include getting pre-approved.

Pre-approval starts by talking to a mortgage officer. They will ask you basic questions and give you a list of documents that they need. According to local loan officer Seth Vanderwey with Churchill Mortgage, “The mortgage professional will be focused on three important things: Cash, credit, and income.” They review these things and if your information meets the beginning guidelines and requirements, and if it appears that you will be able to qualify for the loan, they will issue a pre-approval letter. This is like a half-way step to the official mortgage application.

Getting pre-approved has 3 major benefits. First, it helps you know your price range. Being pre-approved with a mortgage lender will tell you how much they will lend you, and with what loan program. Also, getting pre-approved early will put you in the best position to move forward. Should any red flags come up, you can work them out. If you wait to be pre-approved until you find the house you want, you might not have time to fix any issues that arise. Lastly, and maybe most importantly, when it comes time to write an offer it’s imperative that the sellers know you are pre-approved. This is a first step that sellers and their agents will take when trying to determine the strength of an offer. In today’s hot market it is not uncommon for a seller to receive multiple offers, and if one of the buyers are not pre-approved, their offer is immediately at a huge disadvantage.

When asked for additional insight, Seth Vanderwey stated “The pre-approval process is an important first step in acquiring a mortgage. If done correctly, it creates a smooth transaction. If key questions are not asked by the mortgage professional, or not answered truthfully by the client, it can lead to a stressful process or loan denial part way through the transaction.”

Seth Vanderwey and Churchill Mortgage are in my team of service members that I count on. If you have any questions you can reach Seth at seth.vanderwey@churchillmortgage.com or on his cell phone: (616) 204-4016.

Note: A pre-approval is not a commitment to lend funds but a conditional pre-approval of your loan application and all the conditions listed above are subject to final underwriting and final investor approval.

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