How to get a pre-approval? What is a preapproval?

Learn the importance of Pre-approvals

    What is a pre-approval?
    A pre-approval is essentially the first step you must take before your home hunting journey begins! It's an overlook of your financial health which will help you understand your positioning in today's market. It isn't a committment letter just yet but it helps you understand how much the bank or other lenders are willing to lend you for a mortgage based on key factors like: income, debt ratios, credit score and how much you have available for a down payment. Want to learn more about how to improve your pre-approval? how to correct your credit score? how to save more down payment? or where could I get more money for a down payment? Want to understand how your debt ratios affect your ranking with lenders? Sign up for my ELAVATE program, its a free personal investment education that is a one-on-one conversation designed to help you better your position, set goals and create an action plan. Within this action plan, my team of professionals and I will go over tips and tricks on how you can improve or learn new skillsets! This isn't just for new home buyers, it's for anyone who is willing to learn and better themselves! All of which showing you how to use real estate as a tool.
      Why is a pre-approval so important?
    Due to the high demand in today's market, this is the most important step to insure that you are not entering a bidding war, competing on a property without the basics covered. But secondly what's also very important is understanding the risks of entering a contract (offer) without a pre-approval done and especially if you're competing, you may get caught up in going in with NO CONDITIONS. This is a huge red flag, please don't do this. This is a large liabilty risk as you will be on the hook legally for this property if you can not meet your end of the agreement. If you are viewing properties without a pre-approval, you need to stop and reach out to a professional. Don't have someone in mind? No worries, I can provide you with some contact information. The next question is usually, "Do I use my bank or a mortgage broker?"
Whose the best? Bank or Broker?

Here's something you may have not known.

If you are shopping for a mortgage, your credit score doesn't take a hit like it would shopping for credit cards! So shop away! Sometimes its nice to also shop around to compare rates. You wouldn't buy the first pair of shoes by trying them on would you? You would probably do a bit more research before making that purchase. So why would you just stop shopping for a mortgage? or in other words, just go to your bank? Here's some important information to help you make a decision.

Should I go to my Bank? or a Mortgage Broker?
    The benefits of going to your bank is the important fact that they have established a relationship with you, that's important because sometimes that could mean a better opportunity to get accepted, possibly a better rate. But on the other hand, your bank is limited by the products they can offer you. So this is why I always encourage my clients to seek advice from a mortgage broker who would have access to more lenders! This may be attractive to you because there is more diversity in products. What does products mean? Sometimes your game plan may be short term, you are doing a flip so you don't want a long committment, going to a Broker might give you more opportunities. Your broker may be able to negotiate a better deal for you.
My recommendation is to go to your bank and still speak with a broker, see who can help you best and not only get you the best deal but who can also explain to you what you're actually signing. Know the implications of what you are agreeing to because there is a lot you need to know to make sure that not only are you protected, but are your interests also protected? How so? Well, your goals are important so you need to make sure there is flexibilty for you to do so.

Remember that all lenders want your business, your mortgage is their business, so if you can, create leverage

What does creating leverage mean? It means you can shop around and use your pre-approval agreements as leverage to get a better rate or better terms with other lenders. Sometimes you may be able to get your bank to do better too! Lender flexibilty depends, so ask a Broker for more information. Once again, I can provide you with contacts that I trust to get the job done

Things you should discuss with your mortgage specialists or brokers!

What's your plan? Make sure they understand what you're looking to do, whether that means you're looking for a long term investment in a new home or possibly short term, doing a flip? or just want to refinance in a year or two? All of this information will help them determine which product would best suit you because sometimes these commitments come with hefty penalties that could hinder your ability to move forward with your plans.