Getting Pre-Approved for a Loan

Before beginning to shop for homes, the first step is to get "pre-approved" for a home loan. Pre-approval means that you've met with a home loan officer or broker and discussed your plans, reviewed your credit history and been approved for a specified amount. Once you've been pre-approved, you will receive a pre-approval letter that will be very helpful once you are ready to make an offer on a property.

Also, please remember that there's a difference between pre-qualified and pre-approved. Getting pre-qualified is an informal evaluation of your financial situation without verification of the facts. Therefore, being pre-qualified does not carry much weight. Being pre-approved will require supplying documentation and additional information for verification.

The reason that having a pre-approval letter is important is that the seller and the seller's agent will want to confirm that you have the financial ability to complete the purchase after your offer has been accepted.

There are many sources for home loans including banks, home loan companies, brokers, savings and loans, etc. Any of these can qualify you and provide pre-approval letters. While we do suggest that it's prudent to check with more than one source for financing, we also suggest that you limit the number. The market leaders will provide very comparable loan options. You will be best served by sticking with the strong, well known, reputable suppliers of home loans. After all, not only are you counting on them to come through with the loan and do it properly, but you will have to deal with them for the life of the mortgage.

Although a pre-approval letter is a strong indication of your ability to secure the loan, it is non-binding. In the event that your circustances were to change prior to the actual loan being confirmed, you could fail to secure your loan due to those changes. If you're turned down for credit, you may want to request a copy of your credit report from one of the credit report companies.

To discuss how Minneapolis Urban Homes can assist you with getting a home loan, please contact Richard Newman at rnewman@mplsurbanhomes.com or call 612-749-6503 or 612-206-3916.