Why You Should Call a Lender Now

If you are thinking of buying sometime in the next year, here are a few reasons why you should go ahead and talk to a lender now rather than waiting:

First of all, you generally cannot get an accepted offer on a house without submitting a lender approval letter – in today’s market, sellers are not going to waste time waiting for a buyer to get their approval completed. In addition, it is difficult to put an offer on a house if you don’t know exactly what your purchasing power is. You don’t want to waste time making an offer on a house for $600K only to find out that you cannot qualify for more than $450K.

There is a lot of information to go through and different options to weigh during the approval process. Lenders are now offering many programs that may allow you to put less than 20% down and still obtain a “conventional” loan. However, often these programs have specific credit score and debt to income ratio requirements, so you need to know which of these loans are going to be available to you. You’ll want to have a thorough understanding of the differences in rates and fees between FHA loans and conventional loans as well. Starting the process now gives you that additional time to gather information before you are scrambling to get an offer together.

You may find that your lender doesn’t give you the news you were expecting – you might have much lower credit scores than you thought or your debt to income ratio may be to high to qualify you for the type of loan you were counting on. If this happens, your lender should be able to give you some very specific information about the best way to improve your qualification over the coming months. He or she can give you advice about which debts to pay off first to improve your credit scores so that you can put an organized plan of attack into action.

While it may seem like a daunting process, getting a preapproval is really fairly simple, especially if you are working with a well-respected loan officer. If you are interested in some great lender recommendations, feel free to contact me at any time!