One of the first questions I ask a potential home buyer is, “Have you been pre-approved for a mortgage.” Sometimes the response I get is a simple yes, while other times the buyer just gives an offended look. I don’t ask the question to be nosey. I ask it because it is vital information needed to determine if you the buyer are ready.
A buyer who has not been pre-approved is not ready to look at homes. Yes, you may think you know what you can afford, but until you sit down with a lender you don’t know what you can borrow. As a buyer you should know the costs associated with buying and financing a home before you start to look. Lenders take more than just how much you make into consideration.
They will want to know your income, of course, but they also want to know your job history, credit history and how much debt your currently have. The will look at all the factors, and then they will be able to give you an estimate of what they would be willing to lend. They will let you know the rate at which you can borrow and the fees and expenses that you will incur in closing costs to obtain the mortgage. Once you have all this information you will be ready tostart the process of finding the right home for you.