Getting a financial pre-approval is a first step when you want to buy a home. First you need to know that a Financial Pre-Approval means that a lender has verified that you are in fact qualified to borrow a certain amount to purchase a home. The lender will provide you with a letter that will reassure a possible seller that you are a qualified buyer giving credibility to your offer. So, it’s important to speak to a lender before you start home shopping.
Before you even pick up the phone to call a lender, I recommend you review your monthly budget. Before a lender tells you how much you are qualified to spend on a home each month, you need to decide how much you WANT to spend on a home each month. Consider your lifestyle and future goals. If your son is in preschool and you plan to send him to a spendy private school next year, factor the tuition in. If you’re a foodie and like to go out to eat at least once a week, factor those meals in too. And if you’re a little like me and a new house will mean new decorating opportunities, add that to the budget.
Once you have an idea how much you want to spend on a home, you are ready to contact a lender.
Let’s start with who NOT to CALL! In our current market, I’d stay away from the mega-national-lenders. Quite honestly, I have found that they have become so cumbersome they have lost any semblence of efficiency. I can almost promise that the transaction will not close on time. I’d also steer you away from online lenders. You really need to have a local contact that has an office you can walk into and is familiar with our Oklahoma real estate market. The online lenders do not offer that. Sure they’re handy, you can apply on the web in your jammies while watching Scandal, but most of the local guys offer that convenience too.
Whether you apply online, by phone, or in person you will need to have some information available. Of course you will need basic contact information, SSNs for all applicants, your residence history, your employment history, list of assets and liabilities, and all income information. That will be enough to get you started. You’ll have to provide the lender with supporting documents once you find a house and enter into a contract. So, it’s a good idea to go ahead and get them together in advance. Those include; paystubs, W2s, 3 months of bank statements, retirement/brokerage account statements, divorce decree if applicable, DD214 (for veterans).
Who should you call? Here’s who I recommend (I’ve worked with these guys and feel that my clients always have received excellent customer service.);
- Will Koenig, Cornerstone Home Lending 405-233-3872 APPLY ONLINE
- Jim Rapp, First Mortgage 405-359-8097 APPLY ONLINE
The hardest part is picking up the phone. Still nervous? Let’s talk.
Talk to you soon!