This amounts to:
meeting, either with a lender or with an independent Mortgage Advisor (someone who can walk you through this complicated process and recommend several lenders for you to choose from).
- authorizing them (the lender or the Mortgage Advisor) to review your credit history and other financial information
- based on this review, you will receive a letter documenting how much (i.e. the size of the loan) you are expected to qualify for when you actually apply
(Note: the lender can only tell you how much they would be willing to lend you – not how much you should actually borrow; an independent Mortgage Advisor can provide you with a pre-approval letter as well as help you to think through how much you should reasonably borrow and expect to repay without difficulty. This letter identifies you to sellers and real estate agents as a serious and motivated buyer and any offer you make on a home will be taken more seriously as the result.)
If you would prefer not to take this important step unaided, your real estate agent (see below) can help you to identify either lenders or Mortgage Advisors who have outstanding track records – either way, get this important pre-approval completed before you begin the search process to avoid having to backtrack later
What other factors should you consider before starting your home search?
Several other factors should also be considered during this preparation phase. For some you may have a strong preference and for others no preference at all. However, if you’ve thought a bit about each of these factors beforehand, you will be better equipped to work with your real estate agent and to explore the full range of homes that might be of interest to you.
Location: region, state, county, city or town
Size of home: number of bedrooms, baths, other rooms, basement, garage, out buildings; needed now and in the future
Size of property: acreage; lot size
Taxes: higher or lower compared to comparable areas
Setting: wooded or open; private or near neighbors; urban, suburban, rural; etc.
Age of home: new or older
Style of home: classic colonial, split level, ranch, stone cottage, horse farm, etc.
Condition of home: brand new home, move-in-ready home, needs some TLC, complete fixer-upper, “as is”, distressed property (foreclosure, short sale, real estate-owned, etc.)
Once you’ve put some thought into these questions, even if you’re still a bit unsure about some of them, you’ll be in much better position to move on to the next step: Selecting a Real Estate Agent.