If you're getting ready to become a homeowner, you've probably already discovered that there are a lot of important steps along the way. Getting pre-approval for a home loan is one of the most important steps, and if you're thinking about buying a home in 2020, our REALTORS® are here to help. 

One of the most common questions we get asked is, "When should I get pre-approved?" There are a few factors to consider when answering that question, but one thing is for sure: Before you start looking at Beavercreek homes for sale, it's important to have a pre-approval letter in hand. 

What is Pre-Approval?

Pre-approval is an important step before buying a home because it essentially proves that you have the financial means to do so. When you obtain pre-approval it says to homebuyers that you're ready and able to buy. It also lets you know just how much home you can afford, which makes it easier to find the right house for you.  

During the pre-approval process, a mortgage professional—usually a broker or bank account executive—will examine your financial information and determine whether you will be able to qualify for a mortgage. If so, you will be given a pre-approval letter that will include the amount that you are tentatively pre-qualified for. This amount is not set in stone, but it's a fairly reliable ballpark estimate of your mortgage eligibility.

How do I Get Pre-Approval?

To obtain pre-approval, you will need to supply a potential lender with a variety of documentation that will establish your credit history and financial standing. Keep in mind that it's important to have a good understanding of all this information yourself before you apply: Examine your credit report and take steps to improve your credit score if necessary before applying for pre-approval. You also can (and should) apply with multiple lenders. 

Once you're ready, you'll supply the potential lender with bank statements, pay stubs, tax returns, a copy of your credit report, and usually some additional documents depending on their specific requirements. They will use this information to determine how much you can afford and how risky it would be to offer you a mortgage. The result, hopefully, will be a pre-approval letter. 

When Should I Get Pre-Approved?

There are a lot of factors to consider, but overall the best time to get pre-approved is after you've thoroughly checked your credit report and gotten your financial ducks in a row, but before you actually start looking at houses. Having pre-approval will help narrow the search and let sellers know you're serious about buying, so it's good to get it early on in the process. 

The other factor to consider is how long pre-approval is good for. Generally speaking, pre-approval is valid for about 90 days, although there may be lenders who issue pre-approval letters that are good for more or less time. The expiration date of your pre-approval should be clearly stated in the letter. In most cases, 90 days is the amount of time it might take for your credit and/or financial situation to change significantly, so that's how long most lenders require before reassessing your pre-approval. Keep in mind that it's perfectly acceptable to seek pre-approval more than once if you need to. 

Buying a home can be intimidating, especially if it's your first home, but we're here to help every step of the way. Contact Wright-Patt Realty to learn more about the loan pre-approval process, and talk to our REALTORS® about getting started on the road to homeownership.