Getting pre-approved for an Austin home loan is a crucial FIRST step in the home buying process. Even though you have to find a house to need a loan, you actually need to know how much house you can afford before you begin looking. It may seem like one of those chicken-versus-egg questions: Who comes first, the realtor or the lender? The answer is simple: Always start the home buying process by discussing your finances with a mortgage lender.
Pre-Qualifying for an Austin Home Loan
Pre-qualifying is not the same as getting loan pre-approval. In fact, pre-qualifying for an Austin home loan does not require you to even talk to an actual person. You can go online, answer a few general questions and be given an estimate of how much of a mortgage you might be able to afford. Then you can spend weeks driving around with your realtor, find the house you love, only to discover that the pre-qualifying overestimated how much house you can afford.
Pre-Approval for an Austin Home Loan
While pre-approval may require a little more from you in the beginning, it can save you and your realtor valuable time in the long-run. Being pre-approved for an Austin home loan involves providing your lender with tax returns, bank statements, running credit reports, etc. After carefully evaluating your financial documents, your lender will provide you with a pre-approval letter. A pre-approval letter tells realtors and sellers that you are a serious buyer and it gives you a realistic idea of your price range for a new home.
Of course, pre-approval for an Austin home loan doesn’t mean things can’t go wrong in the home buying process. On the buyer’s side, making significant changes to your financial status could affect the finalizing of your Austin home loan. This includes things like financing a car or a significant change in income. On the seller’s side, any number of things can go wrong with the home inspection that are out of your control and could affect the lender’s ability to give final loan approval.
Be sure to find a mortgage lender you trust, who will give a realistic assessment of your home buying potential during the pre-approval process for an Austin home loan.