If you want to buy a home, you must get pre-approved before anything else.

A pre-approval isn’t just going to the lender and getting a letter. Buyers have to get their assets, income, and credit verified by a lender before they start looking. Why is that?

More often than not, you’ll find a home a lot sooner than you think, especially in a low inventory market. If you don’t have a pre-approval, it’s a bit like going to the store without your purse or wallet. You can find a property you want, but without a pre-approval, you’re not in a position to buy it.

“You need to back up your offer with a lender who has verified everything. ”

You’ll probably be competing against other offers for the home, but even if you aren’t, the seller needs to know that you have the money. A good personality and a smile won’t convince them; you need to back up your offer with a lender who has verified everything.

The other reason you want to get pre-approved ahead of time is that you want to know what your budget is. A lender can tell you that you’re approved for up to $1 million, but that doesn’t matter. What matters is your monthly payment. If you’re only willing to pay $200 more than your current monthly payment, you have to look at buying homes in the relevant price range or bring in a larger down payment.

It’s important to set yourself up for the budget you want by having a lender tell you what your desired purchase price should be. That way, you aren’t looking at homes you can’t have. To use a car analogy, you don’t want to test drive a Lexus, realize that it’s what you want, and then not be able to afford it. Anything less than that will feel like a disappointment.

If you’re looking for a great lender or if you have any questions, please call or email me. I would be happy to connect you with some of our trusted partners.