Getting a Legitimate Lender and Getting Pre-Approved

Pre-Approval: Your Key to Success in Today's Real Estate Market

It used to be that buyers would shop for a house first and then seek pre-approval. However, in today's market, that method is ineffective in landing a dream home. Understanding the difference between pre-qualification and pre-approval is crucial.

Pre-Qualification vs. Pre-Approval

Most lenders can pre-qualify you for a mortgage over the phone based on general, unverified questions about your income, debt, assets, and credit history. A pre-qualified letter essentially doesn't count for much if you are competing with other approved buyers.

Pre-approval means you have officially applied for a mortgage. The process involves:

 

• Filling out the mortgage application.
• Receiving your credit report.
• Verifying your employment, assets, etc.

When you are pre-approved, you know the exact maximum loan amount. This gives you credibility as an interested buyer and immediately assures the seller that you will qualify for a loan to buy their property.

 

Choosing a Legitimate Lender

In addition to being pre-approved, it’s important to be pre-approved with a legitimate lender. Legitimate lenders include:

 

• Banks
• Mortgage bankers
• Credit unions
• Savings and loan associations
• Mortgage brokers
• Online lenders

Some lenders to avoid are those who:

 

• Lose a form or misplace a file.
• Gather information from you in an unorganized manner.
• Are not informed about interest rates, points, or costs.
• Cannot provide you with the right information.