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Why You Need to be Pre-Approved for a Mortgage. NOW.

In what's expected to be a very competitive Spring Market, Caroline Staudt spells out exactly why you should get a pre-approved for a mortgage NOW.


Many homebuyers start their home search by going to a real estate website, such as, and searching in a specific town for homes with X bedrooms and Y baths. Then they look at the beautiful pictures, fall in love with their dream home online, and call a Realtor to show them the house. Some of these buyers may have a sense of what they can afford whereas others may not. 

While looking at pictures is more exciting than thinking about the numbers, this is a classic example of putting the cart before the horse. In this competitive market, unless you are buying a home with cash, you need to talk to a lender first and get pre-approved prior to starting your search.

What is a pre-approval?

When you speak to a lender to get pre-approved, the lender will request and review many of the documents that she will need in order to approve your loan - paystubs, W-2s for the last two years, two years of federal tax returns, two months of bank statements, and your credit report. With this information, she will determine the amount you will be able to borrow and will help you understand what this translates into in terms of monthly payments. She will then provide you with a letter that states that you have been pre-approved for a loan up to the stated amount - also known as a pre-approval letter.

Why do you need the pre-approval?


1. Help you understand what you can afford:

Prior to looking at homes, it is important for buyers to have a realistic understanding of what they can afford. For some buyers, the number may be a welcome surprise whereas for others, it might be a disappointment. In either case, it is essential to know what you can afford before falling in love with your dream home. When you and your Realtor understand what you can afford, you can limit your housing search accordingly and save yourself both time and potential heartache.

2. Give yourself time to improve your credit score:

If, in the process of getting pre-approved, you learn that your credit score is lower than you hoped or that there is an error in your credit report, lenders can often work with you to correct any mistakes and to improve your score. This could help increase the amount for which you are approved or reduce your interest rate.

3. Be ready to put in an offer:

Without a pre-approval, you cannot buy a house. Period. A seller will not review an offer from a non-cash buyer that does not include a pre-approval letter. You do not want to be in a position where you fall in love with a home that you might in fact be able to afford but not to be able to put an offer on it because you have not yet been pre-approved. It is better to be pre-approved prior to searching so that as soon as you find that house, you can make a strong offer. For some buyers this happens quicker than you may think!


If you are starting your home search and are now convinced that you should get pre-approved, we at Better Homes & Gardens Real Estate - The Shanahan Group can recommend trustworthy and reliable lenders who would be happy to speak with you and help you get pre-approved. Give us a call. Here comes the spring market! 


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