Do I Need to be Pre-Approved Before I Go Look for My Home?

Real Estate Agent with ReMAX Realty Professionals - Marker Miller Team

Getting pre-approved for a loan can be a fairly easy process.   So how do you get pre-approved for a home loan?
The bank will look primarily at four different items when you are looking to borrow money for a home.
They are going to look at:  (1) what your annual income is; (2) what your monthly debt obligations are; (3) what your credit score is; and (4) how much money you have available to put as a down payment on the home.

For pre-qualification, the lender is really looking primarily at your annual income.  Generally you can multiply your annual income by 3 and that is generally going to give you an average number for how much house you can afford.  

With a pre-approval they will take it a step further and will need your credit score.  When making an offer on a home, a pre-approval is really what you want rather than a pre-qualification, because a pre-approval allows the
seller to know that you have taken that first serious step in speaking with a bank or mortgage broker.

So, what do you need to bring when you go to the bank?  You will need to bring all of your personal debt and financial statements.  They will want to know any information that has to do with your inflow of money and your outflow of money on a monthly basis.  

The lender will take your monthly inflow and monthly outflow to determine your debt ratio.  The lower this ratio is the better for you and consequently the bank.  A good debt to income ratio puts you in a position of strength with the lender.  By going thru the pre-approval process you will put yourself into a stronger negotiating position with the seller and be able to act quickly when that perfect home comes on the market.

For a detailed checklist on what you need to collect before making an appointment with your lender, call the Marker Miller Team today at 812-360-3863 or email us at and we will help you prepare for that first meeting.

Lesa Miller 
Marker Miller Team

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