Now that you have a sense of what you can afford, it’s time to talk to the bank (specifically someone called the mortgage loan officer) so they can help you estimate how much loan can you afford to take out. A pre-approval letter or qualification is needed when you place an offer on a house and most offers will have this as a prerequisite. While, a pre-approval letter does not guarantee a loan, it’s a great starting point.

Tips:

• Talk to at least 5 loan officers that are local to your area. They will know the local real estate market better. You can use Zillow to find the best customer rated mortgage providers.

• Pre-approvals do not affect your credit score unless you follow through and apply for credit much later in the homebuying process.

• One consideration when selecting your lender is that loan officers at big banks do not typically respond on the weekends; meaning, if you are placing an offer on a house on Monday morning, you may not be able to reach your loan officer to get an updated pre-approval letter. Each offer (bid) you place on a property is going to be different since you don’t want to disclose the highest amount you can afford. So you have to keep updating your pre-approval letter to match the offer price.

• Loan officers at smaller community banks are typically more responsive, especially during the weekends.

• It’s okay to have more than one pre-approval letter and from multiple banks. Once your offer is accepted, you can determine the best loan package and then engage the bank. Make sure you incorporate closing costs and other fees in the total package (reflected by the APR %). Do not submit more than one pre-approval while placing an offer.

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