If you’re a first-time homeowner or unfamiliar with the real estate business, the process of obtaining pre-approval from a mortgage lender can be perplexing. Let’s take a look at how the pre-approval process works for homebuyers in Sarasota to get you ready for a big step in the average buyer’s road to homeownership:
Check Your Credit
Before applying for a mortgage or any other form of loan, you should first get your free annual credit report from one of the three major credit reporting agencies.
This report acts as a sort of financial background check on you, and you want to make sure everything on it is accurate in order to prevent any complications arising when purchasing your home.
Examine the full report from beginning to end, noting anything that appears strange or completely inaccurate. After that, you have the option of contacting the credit reporting bureau and requesting modifications. Alternatively, you may uncover an unpaid bill that you had forgotten about and be able to properly resolve the situation.
Once you know your credit is accurate and cleared up, you’re certainly ready to move forward with the pre-approval process.
Browse Your Lender Options
Not all mortgage lenders are alike, and it’s up to you to find out which one is best for you.
When you’re looking for a lender, you’ll want to know about possible interest rates, payment options, and the sorts of mortgages they offer. A lender’s mortgages can include a variety of loan terms (10-year, 20-year, 30-year) as well as programmes such as VA or USDA loans.
If you are looking to acquire a VA or USDA loan, it’s highly suggested that you find your lender through your local branch of the Federal Housing Administration to avoid any possible predatory or fraudulent lenders.
Apply for the Loan
It’s time to get the ball rolling by going through the lender’s application process once you’ve discovered your lender of choice and a home you’re interested in.
You will be required to include financial details on the home you are looking to buy and the lender is likely to want to know some basic information regarding your income.
It is critical that you complete the application completely and accurately. If you lie about your income or the worth of the property you want to bid on, you’ll simply end up in trouble later.
After you’ve submitted your application, it’ll only be a matter of time before they contact you, and you may either continue the pre-approval process or find a new lender.
Cooperate With Your Lender
After you’ve submitted your application to your lender, you’ll need to provide some documents to show that you have access to funds, regular income, employment, and maybe other parts of your financial life.
At this point, it’s very important to quickly hand over any requested documentation to your lender and keep in touch regularly. They will contact you to keep you updated, but if you ever have any questions or concerns, let them know.
Receive Your Pre-Approval Letter
After your lender has determined you are in a financial state that they are likely willing to approve the loan you have requested, you will receive a pre-approval letter.
This letter holds a lot of weight with agents and sellers since it demonstrates that you are not just dedicated to buying a certain home, but also that your lender believes you will be able to manage the acquisition and act responsibly.
Use that pre-approval letter to your advantage and let it shine through your offer and negotiation.
Help Navigating the Pre-Approval Process in Sarasota
If you’re looking to purchase a home in Sarasota and have questions about the pre-approval process, contact us today at (813) 993-0520!