Should I Speak To A Lender Before I Look At Homes

Dated: December 20 2017

Views: 2489

Image title

I always get the question. Should I speak to a lender before looking at homes?

In most scenarios, it makes sense for home buyers to get pre-approved for a mortgage before you start looking at houses. There’s a certain logic to doing things in this order. After all, the pre-approval process helps you focus your search on the types of properties that you can afford, based on the lender’s willingness to lend.

With that being said, the pre-approval review process is no substitute for old-fashioned budgeting. You should still take a good hard look at your income and expenses to determine how much of a monthly payment you can afford. The pre-approval process comes into the picture later, when you’re actually ready to start shopping for a home. You should already have a budget in mind when you move onto this next stage.

There’s another good reason to get pre-approved before house hunting. Sellers (and their real estate agents) will give your offer priority over any other offers that have not been reviewed by a lender yet. In other words, they will take you more seriously as a potential buyer. 

It makes perfect sense, when you think about it from the seller’s perspective. The last thing the seller wants to do is accept an offer from someone who is not qualified to get a mortgage loan. You negotiate back and forth. You agree on a price. You take the house off the market (maybe) and wait around for the home inspection. And then you find out the buyer can’t even qualify for a loan. That’s a waste of everyone’s time. So it’s a good idea to get pre-approved before looking at houses, or as early on as possible.

It’s also worth noting that pre-approval is not the same as the final approval. You can still be turned down for a mortgage loan after you’ve been pre-approved by a loan officer. It happens all the time.

“Pre” means that it occurs on the front end of the mortgage process. In order to get a final approval from the lender, you must also go through a rigorous underwriting process. The underwriter will review your loan application and your credentials to determine if you are an acceptable risk for the lender. Only when the underwriter gives a “green light” will you receive a final approval.

The lender I entrust with my clients is Shay Gaytan Feel free to reach out to her with more specific questions about your unique situation. 

Blog author image

Carlos Garcia

A native Austinite, Carlos grew up in South Austin and wouldn’t dream of living anywhere else. He is admittedly biased to the South Austin lifestyle, though he loves helping friends in all areas of ....

Latest Blog Posts

A Return To Normal The State Of Real Estate In 2022

Last year was one for the real estate history books. The pandemic helped usher in a buying frenzy that caused home prices to soar nationwide by a record 19.9% between August 2020 and August 2021

Read More

20 Unique Home Gifts For Every Person On Your List

Every year, it seems the holidays sneak up on us—and every year, that brings with it the dreaded-last minute gift panic. Finding a present that hits all the right notes can be surprisingly

Read More

South Padre Island Yummies Bistro

Yummies - South Padre IslandMy brother is a great guy and anytime I have a chance to spend some time with him, I embrace it. I wrote this  blog a couple of years ago, but I went again! This

Read More

New Build Or Existing Home Which One Is Right For You

Homebuyers today are facing a huge dilemma. There simply aren’t enough homes for sale.1Nationwide, there were 1.27 million active listings in September, down 13% from the previous year. According

Read More