My partner posted a few days ago about the first step in a real estate transaction. But Buyers often ask me “After I select my agent, what should be my first step?"
Most buyers, after selecting their REALTOR, are naturally excited to start searching for their new home. Thoughts abound; how many bedrooms? How many baths? Fireplace? Family room? Yard? Garage? Finished basement?
Wait wait wait. You might be getting a little ahead of yourself. Before you get out there and start looking at all those beautiful homes and thinking about what type of features you may need, there is an important first step that your agent should recommend you take.
That first step is better known as MORTGAGE PRE-APPROVAL. Not too long ago the steps were reversed: you would find your home, enter into an agreement of sale, and then search for a mortgage. The pre-approval process has now become a very important first step.
What Does Mortgage Pre-approval Mean?
The definition is really in the name. You get approved for a mortgage before you find your dream home. The pre-approval is a written commitment from the lender that you may borrow a specific loan amount.
The process is fairly simple, and with your Realtor’s advice and guidance, you will select a Mortgage company that is reputable and service-oriented. Try to find a local lender that will be part of the process through settlement. You will meet with a representative of the mortgage company (the loan officer). This meeting will allow you to provide financial information to the Mortgage company so they can start the pre-approval process. This meeting can also take place over the phone with information being emailed or faxed to the loan officer.
Finding your dream home can be a wonderful experience and searching for a home is always exciting. Just remember to take that first step, and get pre-approved! It makes all the remaining steps less cumbersome and much more rewarding.
