Utah mortgage brokers typically check your credit before issuing a pre-approval letter, and the letter will have an expiration date on it (typically 30 to 90 days). For these reasons, many people wait to get a pre-approval letter until they are ready to begin shopping seriously for a home. However, getting pre-approved early in the process can be a good way to spot potential issues in time to correct them. These letters can usually be updated easily as well.
Every mortgage broker or lender has a different loan process. Find out what you need to do and what documentation is required. There are also certain things you should avoid doing during and after the pre-approval process.
Ask your mortgage broker what assumptions are being made to issue the pre-approval. Is there anything about your situation that could lead to your loan being denied later on, or that could increase your interest rate or loan costs? Find out if they charge for the pre-approval, Advanced Funding does not charge for this process.
Some mortgage brokers base pre-approval letters solely on the information you provide. Other lenders dig into the details with you to make certain you have all the documentation you need and prevent delays and surprises later. All mortgage lenders will require documentation at some point if you decide to apply for a loan. It’s better to know now that you need additional documents than when you’re about to close.
A pre-approval letter just says that a lender is willing to lend to you, pending further confirmation of details, such as a commitment of title, appraisal, etc. A pre-approval helps you shop for a home because it lets the seller know you are a serious buyer.
Mortgage companies in Utah will pre-approve you by looking at your income, assets, debts, and credit report. But your financial situation is much more complicated than that. Only you can decide how much you’re comfortable paying each month on a payment, which means only you can decide how much to spend on a home.
If you are pre-approved for more than the home price budget you set for yourself, you can use the pre-approval letter to shop for homes without changing your target home price. If you’re happy with the amount you planned to spend, stick with your original budget.
If you were pre-approved for less than you were planning to spend on a home, talk with us to see what other options that may be available. Ask if there was a particular factor (for example, your income) that limited the pre-approval amount. You may need to adjust your home price expectations.
Be upfront with your real estate agent. If you don’t want to see homes above a certain price, say so. Limiting your search is a good way to avoid falling in love with a home that costs more than you want to spend.
For more information regarding getting a pre-approval letter contact your mortgage broker at 801.272.0600.