Do I need to get a mortgage pre-approval before I start looking for a new home to purchase?
Absolutely, yes. Getting pre-approved by a licensed mortgage lender is critically important, it’s actually the first step in the home buying process. To start this step, your mortgage representative will run your credit and will request to see your most recent pay-stubs, current tax returns, and financial-bank statements with current balances. With this financial data, your mortgage rep will assess your buying ability and can let you know how much you are pre-approved for as well as the monthly payment due for that loan amount. Your rep will also discuss with you the pros and cons for buying points, the down payment options and closing costs.
Now that you have a clear understanding of how much a bank is willing to lend you and the various costs associated with that loan, you can start looking for homes that are listed within your pre-determined price range. The minute you see that dream home, you will be prepared to submit a written offer along with your mortgage pre-approval letter to back up your offer.
If you don’t have a mortgage rep, don’t worry, ask your local real estate agent for a recommendation.