Friday, November 15, 2019 / by Andy Mandel
Among the most common mistakes buyers make during their home search, the biggest of all is failing to get pre-approved by a lender. As exciting a time as it may be, not getting pre-approved before starting your search is putting the cart before the horse.
In some instances, buyers that bypass the pre-approval end up looking for homes in price points well above their affordability. In other cases, when buyers meet with a lender, they’re surprised to learn that they can afford much more than they thought.
A lender will look at the totality of documents needed to apply for a mortgage. By doing this, they’ll be able to make an upfront determination so that when you go to write an offer on a home, there’ll be no uncertainty around whether or not you’ll receive approval.
If you’re self-employed, for example, a little more documentation will be required for the approval process, so speaking to a lender in advance will serve you better down the line.
Let’s say you’d like to receive financing through an FHA loan, and you have your sights set on buying a condo. Well, it’s virtually impossible to purchase this type of property with an FHA loan.
If you’re not informed early on, you’ll waste time that you otherwise could have devoted toward properties that are aligned with the mortgage you qualify for.
It’s fairly common for buyers to have a blemish or two on their credit that continues to affect their score over time. A good lender can work with you ahead of time and help you erase these and pay off some old debts.
Recently, a client of mine saw her score receive a 50-point bump thanks to the work of a good lender! This propelled her into a whole new credit category and, as a result, she’s now eligible for a much lower mortgage rate. Like this particular client, doing this could actually save you thousands of dollars over the life of your loan.
If you need a recommendation for a great mortgage lender, please let us know. We work with some of the best in the area and even the industry. And, as always, if you have any questions related to real estate, reach out as well. We’re always here for you!