Step 2 – Get Approved for a Loan!
The process of buying a home starts with determining your buying power; that is, your cash available plus your borrowing capacity.
This is a vital step in the buying process – often, the difference between having your offer accepted or rejected. It has always been our policy for each Buyer to obtain a “Pre-Approval” letter from a reputable Mortgage Lender which will be included with any purchase offer you wish to submit on a home. We will assist you in this process.
As a first step, your lender will ask you a series of questions such as your available cash reserves, income, current debt, cash to be freed up on the sale of your existing home, employer provided allowances for moving costs, and so on. We, as Realtors, do not get access to any of this personal financial information. That is only between you and your lender.
In this way, he can provide you with a good estimate of your purchasing power and recommend you to a type of mortgage most suited to your unique situation, whether you require FHA, VA, Jumbo, Conventional, or a first time home buyer program. He will do this for you whether you are Credit Perfect or Credit Challenged!
Of course, if you’re a cash buyer this step is quite different. Instead of a pre-approval letter to be submitted with your offer, you will need to provide a “proof of funds” letter.