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September 14, 2010 | 2 CommentsTags: Buying, Loans, Mortgage
Sometimes the best offense is a good defense. We’ve all heard that saying many times. I believe it only works for certain situations. However, in today’s real estate market I think it holds especially true. If your looking to buy a home the best way to go about doing that is to get pre-approved from your lender.
The basic gist behind the pre-approval is that, “It allows you to know what you can afford,” says Michael Regan from The Regan Team Home Loan Group. “So when you find a house, you can make an offer immediately and you know you qualify.” Based on our experience this makes the search a smoother process for everyone involved because you spend your time on properties you CAN afford instead of properties you WANT to afford. There is no point in falling in love with a 5 bedroom Victorian style home in West Petaluma to find out afterward that you can only afford a 3 bedroom modern family home in East Petaluma .
The process behind the pre-approval is relatively simple. Start by having your REALTOR® recommend a mortgage specialist that fits your specific needs. From there, Michael Regan states that you need:
• Last 2 years tax returns
• Last 2 years W2’s tax forms
• Last 30 days pay stubs
• Last 2 bank statements
• Your credit will be pulled
Before you even start looking for a house it might seem a little time intensive and intrusive but remember that you will be going through this process anyway so its better to get it done before for your own piece of mind.
The downside to getting this done when starting out is relatively minor. “If you shop 10 different lenders and they each pull your credit that may have a negative impact on your FICO, but having one pull won’t destroy you.” Says Michael. This is why talking with your REALTOR® is important, they will help guide you to a lender that is right for you. Of course you must speak with your REALTOR® or lender to see how the pre-approval process will personally affect you.
Talk with the professionals and prepare yourself by getting the pre-approval before searching for the home so you can be sure that your time is not wasted and that your good defense puts you in position for your best offense.