Step 1: Get Loan Pre-Approval

Unless you can pay cash for a house, you’ll need a home loan with monthly payments you can comfortably afford. When you get serious about finding your next home, you need two people on your team – a Realtor who knows the market well and can help you find the “right” house and a loan officer who can deliver the home loan that enables you to buy it.

Sellers want to know you can buy their house. When they receive an offer, they want evidence that you can get a loan for the purchase. A home loan Pre-Approval Letter is that evidence. It says that you have talked to a loan consultant, presented financial information, and will be able to obtain a loan for a specific amount at an estimated interest rate under certain conditions – that the house is worth what you are paying, that the sellers can deliver ‘clear’ title, that your financial picture can be verified at the close of escrow.

When you select Ila or Jim to be your Realtor – Thank You! You need a loan consultant you can trust. If you haven’t already found one, I can recommend a trustworthy loan officer.

Here’s how it works: You meet with a loan officer, providing enough information that the loan consultant can advise you whether a home loan will be possible. The questions will include what kind of work you do, what you earn, other property you may own, how much debt you have now, whether creditors have obtained judgments against you, anything useful in developing a financial profile. If your FICO score is too low, the loan consultant will offer advice on how to position yourself to get a home loan in the future. There is no charge for this consultation.

The loan officer will ask what monthly payment you are comfortable with and give you an estimate of your monthly payment that includes a price range, interest rate, property tax and insurance payments that enable you to buy a home up to that payment. If you want to work with that loan officer, you will authorize him or her to obtain your credit scores, verify your employment, and dig deeper into your financial history. When the loan officer obtains your credit information, the “inquiry” will be recorded and could lower your FICO score. If you want to shop around and have other mortgage bankers check your credit, do it within 30 days. The credit reporting companies will count all mortgage-related inquiries as one “hit” on your credit within that 30-day period.

Pre-Approval Letter: After checking your credit, and reviewing your tax returns, pay stubs and so on, the loan officer can write a Pre-Approval Letter stating that you are approved for a loan of a certain amount, subject to identifying a property that appraises for that amount and a final credit review. A Good-Faith Estimate will tell you what your monthly payment will be.

When we find a house you want to purchase, the loan officer can provide a Pre-Approval Letter for the exact amount of money you would need. We will include that letter with your offer.

Step 2: Select Neighborhoods Where You Want to Live