If you are like most home buyers, you will put off getting a loan approval. You know that you will easily qualify, so you plan to select your loan product and mortgage company once you're ready to make an offer. When you find the perfect home, you’ll simply make a phone call to a lender, get a loan approval letter, and get the home under contract. What could be easier?
When you present a purchase offer, you must prove that you have the means to purchase the home. The basic loan pre-qualification is superficial and simply isn't enough. Do all of your homework upfront, get the very best loan approval letter, and get the house.
Shop around for loan products and speak to loan officers first. See this primer to understand common programs and strategies. A loan officer will pull your credit, review income and will advise on the best programs for you. Now is the time to resolve issues on your credit report so you can get the lowest rate on your loan.
All loan officers are not the same. Getting through the loan process can be exhausting and painful, so you ideally want a local, experienced loan officer. Your loan officer will have great rates and will be responsive throughout the entire process. Also, expect that the seller’s real estate agent to call your loan officer when evaluating your purchase offer. An 800 number for an out-of-state agent will not give the seller confidence that your loan will be funded without delays or issues.
Now, even before you've found your dream home, commit to your loan officer and make full loan application. You’ll fill out a detailed loan application, confirm employment, provide bank statements, and provide tax returns if required. Your loan processor will pass your application and all documentation to the underwriter for approval. Now you have the very best loan approval letter you can get. It should look something like this: