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Picture this: you’ve found the perfect real estate, and you’re ready to buy it that moment, but then you realize there’s a fatal flaw in your plan: you don’t have a loan!
Unfortunately, most sellers only accept offers from pre-approved buyers, and that’s not going to happen in the next twenty minutes. But fortunately, there are steps you can take so you can make sure you get a loan as quickly as possible. Here they are:
Shop for loans: Start by visiting a local bank and searching for mortgage providers online. A mortgage loan officer will give you an accurate estimate of all the closing costs and interest rates so you can be sure you are in the right state to start a mortgage and will prepare you for everything to come. Keep your credit score in mind, but don’t try to worry about it too much when you’re shopping for loans. Every inquiry isn’t going to hurt your credit score if you go about your searching in the right ways. FICO, the Fair Isaac Corporation, will allow you to do all your shopping without making any hole in your credit score. They do this by giving you a fourteen-day window to shop in; following a strict timeline is key to staying on track with your home-buying process.
Get a pre-qualification letter: During your mortgage shopping, be sure to ask your lender for this letter. This should be easy to get, and gives a rough estimate of the size of the loan you are qualified to receive. Most lenders will assess your income, debts, and down payment size in order to get an accurate estimate, so be sure to tell them the truth. Remember, taking out a loan from the same person who gives you a pre-qualification letter is not required.
Get pre-approved: This means that the lenders will verify everything you’ve said to them. Make sure you have all your documents ready – your identification, social security cards, proof of income, assets and employment – when you come to this step. That way, you don’t waste any time going back and forth from the lender’s office. Then a credit report will be pulled, given that you have stable employment and no debt, so that your pre-approval is certified. If there are complicated factors, like if you own several houses, have had a divorce, or are in a lot of debt, this process will take more time.
Get your loan-approval finalized: Now you’re ready to make an offer. This appraisal is official verification that you are eligible and that the market value on the home is reasonable. Once the appraiser makes his or her inspection and decision, the approval will come within two days. After this, if the decision is approved and not rejected, you are finally ready to start packing up and moving into your new place!
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