Do I Need a Mortgage Preapproval?

Yes!  Unless you a paying cash for a property, you will need to speak with a mortgage lender or two or three, and get a preapproval before you head out to search for a new home.  The lender will ask you to provide documents such as recent paystubs, job history, debts and bank account information, and tax returns, and will use that info along with a credit report to determine not only that you're credit worthy of a mortgage, but also how much of a mortgage you qualify for.  Keep in mind that as interest rates change - and your debts are paid down or increase - that mortgage approval amount may vary.

The preapproval is super helpful in allowing you to determine your budget.  Just because you're preapproved for a specific amount doesn't mean you have to spend that much, though!  You may want to keep some money in reserve to buy furniture or make repairs or updates after you move into your new home.  Or you may just want to keep a "cushion" in case something unexpected pops up.  It's up to you, of course, to determine just how much of that preapproval amount you want to use and how comfortable you will be with the monthly mortgage payment.

The preapproval is also very important when it comes time to make an offer.  A seller wants to know that you are really able to purchase their home.  A preapproval tells them that you have been vetted and are eligible for a loan.  It would be extremely rare to find a seller who is willing to take an offer from someone who doesn't have a mortgage preapproval.  Having a preapproval is just one more piece of the buying puzzle that will give you a leg up on other buyers in this competitive market!  We are happy to share the contact information for lenders with whom we have successfully worked.  A great relationship between Realtor, lender and client helps to make the buying process smoother and less stressful.