Homebuying – What’s My First Step?
Tired of apartment living? Sick of paying on a month-to-month basis with nothing to show for it? Relocating from another area? Outgrow your own house? From the first-time buyer to the seasoned pro, there are plenty of reasons to purchase a new home. If you’ve decided it’s time to do so, the task can seem daunting. The first step always seems like one of the hardest, and more than likely the reason why is the initial question one has to ask: What IS the first step on the path to homeownership?
At Evolve Home Loans, we understand the desire to start looking for that dream home. It’s only natural to start browsing websites such as Zillow, or to take a trip to a new development to walk through model homes. However, before you seek out a realtor and begin looking for that new space, we highly advise that the first step in your homebuying journey is seeking pre-approval for a home loan.
What Is Pre-Approval and What Does the Process Involve?
A pre-approval is an essential first step in the homebuying process. By partnering with a mortgage lender, a mortgage application is filled out, credit checks are performed, incomes are verified, tax information is gathered, possible mortgage approval issues are identified, and ultimately, a realistic qualifying amount is set so the buyer is aware of a true home-buying budget. After the pre-approval process, the homebuyer is provided a Good Faith Estimate that can include not only a loan amount, but also an estimates of closing fees and interest rates.*
Important to note: You may hear the term “pre-qualify” thrown into the mix as well. A pre-qualification is less stringent than pre-approval, and does not paint as accurate a picture of a true amount as it is more informal is not as thorough with credit checks, verifications, etc. This is why at Evolve Home Loans, we are here to help you through the pre-approval process.
By completing a loan pre-approval, you’re saving yourself, your mortgage lender, and your realtor valuable time by being able to budget and narrow down your options in the process of buying your home – in fact, many real estate agents set pre-approval as a requirement before the house hunting begins! As far as real estate agents go, once you are pre-approved, our team at Evolve Home Loans will be able to help match you with a realtor that may specialize with specific budgets, geographical locations, and housing types.
By starting with this step first, homebuyers are able to approach their home search with common sense, as well as less headache and heartbreak further down the road. Know your range, don’t guess, and be taken more seriously as you navigate the entire process. Buying a new (or new-to-you) home is a huge step – we are here to help you take the first step with confidence, and will be here to assist you along the way!
*Although a pre-approval is more detailed than pre-qualification, it is also important to note that it is in no way a loan guarantee. While pre-approval is an essential first step in the mortgage process, life changes such as employment and fluctuating credit rates can affect actual loan approval. Until the actual loan process is closed, approval is pending. With that in mind, our team is here to guide you through the entire mortgage process.