Get The Money To Buy A Home
Any good real estate agent will start a homebuying conversation by asking you if you are pre-approved. Don’t misinterpret that they are being rude or nosy about your financial situation. Sellers expect that buyer’s visiting their home have talked with a lender to make sure they are a capable buyer, before they let people explore the private spaces of their home. It is also important that an agent confirms they are showing you homes that will fit your expectations and budget.
Plan to get pre-approved before you start your search. Unless you are going to pay cash for your home (in which case you will be asked for proof of funds) then you need to talk with a mortgage lender to determine your buying power. (See my page on financing for a list of lenders that I frequently work with)
Based on your income and credit, the loan officer will issue a letter stating the amount they will lend you. This is your ticket to looking at homes but be aware, a pre-approval letter is just a start, it is a quick look at your finances, not a guarantee of your ability to get the loan. After your offer is accepted and you make a mortgage application the lender will really dig in to your finances. And if your situation changes it can change your ability to purchase so never make major financial changes while in the process of buying a home without clearing it with your lender first.
Any offer you make will include a copy of your pre-approval. This is a way of assuring the seller that you are likely to get your mortgage. Sellers will rarely accept an offer without a pre-approval or proof of funds. Since you never know when the perfect house will pop up, it’s best to have this part done ahead of time.
Your credit score and report will have an impact on your ability to buy, and the terms of your loan. Credit scores below 620, will make it more difficult to get a loan. If your score is too low to buy now then it might be time to talk with a housing counselor who can help you get ready. (The folks at The Mon Valley Initiative have housing counselors that can help you get ready to buy)