Why Mortgage Preapproval Should Come First

One of the most common questions we get is, “Do I need a preapproval before I start looking at homes?”

So we brought in our mortgage expert, Jess Riley from Envoy Mortgage, to help answer that question.

The short answer is absolutely. It’s extremely important to have a preapproval in place before you start looking at homes. Without one, you don’t know what products and programs you’re actually eligible for. You also don’t know the price range you qualify for or what you are comfortable with.

When Jess does a preapproval letter, she looks at things like where interest rates are and what your payment would be at a given purchase price to make sure you’re shopping in the right range. And if you want to be considered a serious buyer by sellers, you have to have that preapproval letter in place to make an offer.

Getting preapproved doesn’t mean you have to buy right away. A lot of buyers hesitate because getting preapproved feels official, like it means they’re buying a house and need to move quickly. That’s not the case. A lot of times, it’s just about getting enough information to know what you can buy and what programs you’re eligible for. The process is simple, especially when you’re working with great local lenders. Don’t be afraid of it.

Here’s what you need to get started. Getting preapproved starts with a loan application, which you can complete online at your convenience. From there, you will need to provide some documentation. Jess calls it the homework she gives her buyers. You will need to document two things: your income and your assets. That means pay stubs, W-2s, and, if you are self-employed, the last two years of tax returns.

For assets, you will need bank account statements or investment account statements. Everything can be submitted online through a secure portal, so your information is protected.

You don’t need to have all the answers before you start. Some buyers feel like they need to research every loan program and know exactly what they qualify for before reaching out. That’s not the case. That’s the lender’s job.

The hardest part is usually just gathering the documentation; beyond that, you don’t need to know which price range you should qualify for or which programs are right for you. That’s what we’re here to help with.

If you’re looking to start the home-buying process or just have questions about the local real estate market in Madison, we’re always happy to help.

You can reach out to Jess Riley directly at (815) 997-0149 by call or text. You can also reach our team at (608) 345-6594, email info@holtrealestateteam.com, or visit holtrealestateteam.com for more information.

Watch our video above for the full conversation. We’d love to help you start the journey of purchasing a new home.