Pre-approval for a home mortgage shows potential sellers that you are serious and qualified to purchase a home. Pre-approval is a virtual must in a crowded marketplace. You don’t want to start down the process of finding your dream home, only to be tripped up by a lack of funds. Pre-approval allows you to move quickly once you find the home you want. The mortgage pre-approval process isn’t complicated, but it’s important to be prepared and to shop around for the best interest rates. Here’s a quick guide to the process that will help you get ready to take the next step in your homeownership journey.
Know What Factors Will Be Considered During Your Pre-Approval
Before you seek mortgage pre-approval, you should know what factors a potential lender will be examining. Your credit score, debt-to-income ratio, and loan-to-value ratio will all be factored into the approval process. Seeking pre-approval well in advance (six months to a year) of your anticipated home purchase can help you prepare financially. You may discover that your credit score is lower than anticipated. You can work to better that score between your pre-approval and home purchase. The same goes for your debt-to-income ratio. By saving a larger down payment, you can also seduce the loan-to-value ratio of your mortgage.
Search Different Lenders to Ensure the Best Deal
Every lender will consider more-or-less the same criteria during your pre-approval process. However, not every lender will come back to you with the same mortgage rates. That’s why it’s important to shop around with different lenders. You want to find the best deal that makes the most financial sense for your family. To do that, you must take the time to explore all of your options. Your real estate agent may also put you in contact with home loan officers to assist you during your search.
Decide on the Mortgage Product that Suits You Best
Your loan is ultimately a product. You can shop at different “stores” (lenders) to find the product that best suits your needs. The interest rate and down payment amount can be variable depending on the personal financial criteria that you submit to the lender. Ultimately, this is a financial that you need to make individually, or as a family. Once you decide on the mortgage product that works best for you, you can narrow your home search based on the criteria that you have. This will make the process easier and save you some time.
Find Your Ideal Omaha Home with Bill Swanson
Bill Swanson and his team have decades of experience helping families buy and sell homes. As an Omaha native, Bill knows the metro area, and can match you with the right neighborhood and home options for you. If you need help finding a mortgage officer, Bill has trusted contacts in this arena too. Learn more about home mortgages and buying with Bill Swanson by contacting his Omaha, NE office at 402-679-6566.