You have decided you want to move, you are going to buy a home – maybe your first home, maybe a bigger home than you currently have? You know your finances are in order, you know you can afford it. You start looking – maybe online – and find a home you love! Now what?
Most will immediately call a realtor – maybe a friend or someone they used before – or maybe the person that has the home listed. Typically a realtor will ask if you have met with a loan officer. If you haven’t, they will tell you to meet with a loan officer – usually before they take you out to see a home. Sometimes they will show you a home before you have met with a loan officer.
So you find a home you love – maybe even write an offer on it. Without the approval letter, most realtors won’t even look at your offer. There are many things that come up during the mortgage approval process that can affect your financing. Maybe you think your credit is great – what if it’s not as good as you think? Maybe you need a specific credit score for a program you want to use and it’s not there. What if you just switched jobs – maybe you went from salary to commission – or even self employment? If you did, you may not have any income that can be used in the new loan.
I hear from clients that their credit is great – or maybe they don’t have any. When I pull the credit report, things show up! It may be an old collection account or maybe a past due account. I had a client call me once and said their credit was great, as I was talking with them I started asking questions – turned out they had just filed bankruptcy and their lawyer said everything was fine. They told me they didn’t have any debt – I said they couldn’t do anything for at least 2 years due to the bankruptcy.
Your first step in house hunting is getting that approval letter -it can mean the difference when you find the home of your dreams! Your lender will want to see your credit report, paystubs, w2’s and tax forms, bank statements and maybe more. Depending on your situation, they may need bankruptcy docs, divorce decree, VA forms, etc. Once you have provided the necessary documentation, they will run your file through underwriting and hopefully get the approval you want!
Once you have that approval letter, you are ready to go house shopping!! Let your realtor know you are all set and then you can start looking! That way you won’t lose the home of your dreams to someone else!!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
