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The Home buying Process: Consult and Pre-Approval

January 6, 2021
When you think about buying a house, the first thing you may feel is stress. Moving is actually cited as the third most stressful event in someone’s life right behind divorce and the loss of a loved one. That’s heavy but buying a house doesn’t have to be. Buying a house involves a lot of research, legal jargon, and money which can all add up to an especially stressful experience. If you are dreaming of buying a new home but feel overwhelmed by the process, you’ve come to the right place

The home buying process shouldn’t have to be stressful, and with the right tools, team, and knowledge you could navigate it like a pro and move into the home of your dreams with ease. Each month we’ll be highlighting one step in the home buying process and uncovering the answers to all your questions. How do you even get a mortgage? What’s a loan officer and do I need one? How do I make an offer? What’s the right loan for me? Appraisals and inspections? How much should I save for a downpayment? Are there other fees I don’t know about?

Knowledge is power and you should feel confident when making arguably the biggest financial decision of your life. The first step of the home buying process is just a conversation.

So You Want To Buy A House...

So you think you’re ready to buy a house? That’s awesome. Before you get lost on Zillow searching for the perfect modern farmhouse, let’s take a few steps back. 


Define your budget and get to know your finances. Buying a house is a large purchase, and you should do lots of research and preparation to ensure you’re actually ready to make it. Get familiar with your finances and that means being honest about all of your debt. You’ll want to have a solid idea of what your credit score is, how much credit card debt you’re holding, and any other debts you may have (student loans, car payments, etc.). Did you know things like your cell phone and cable bills don’t count towards your debt when talking about obtaining a mortgage? 


Debt is a crucial part of deciding whether you can afford to buy and eventually pay for a home. Holding debt isn’t necessarily a bad thing. Something like student loans you’re actively paying off on-time is one thing, but carrying huge balances on a credit card or missing payments altogether will present as a red flag to banks and lenders. 


Getting a handle on your finances can give you a serious reality check about how much you’re making versus how much you’re spending, how much debt you’re in, and if throwing another large expense into the mix is a smart financial decision. If you’re looking for tips on how to start managing your budget better, check out our last blog all about financial planning and budgeting. 


Once you feel confident in your financial picture, the next step is to decide on things like a possible budget, research where you may want to live (neighborhood, schools, commute, etc.), and create your must-have list for your future home. Having all of these things in order before you start the home search will save you the headache later on in the home buying process.


What’s a Loan Officer?

When you think about buying a home, the first person you’ll think about is a Real Estate Agent. That’s great because you should find professional help to assist you in navigating this process. A Real Estate Agent will be able to help you find your dream home, advise you on things like what other homes nearby are selling for and advocate for you in the negotiating process. 


But did you know that a Real Estate Agent is just one part of the equation? The other professional you’ll need to find for your team is a Loan Officer. 


A Loan Officer is someone who works for the bank or lender you are going to be borrowing money from to pay for your home. You may think that this should be someone far removed from the experience of finding your dream home, but having an experienced and reliable Loan Officer on your home buying team is a game-changer and will make your Real Estate Agent feel far more comfortable showing your homes. 


Things a Loan Officer does:

  • Talks with your about your financial goals
  • The expert that will educate you on what your mortgage is and how it will affect your financial situation
  • Takes down all your financial information to determine what the best loan product is for your unique situation and how much you qualify to borrow
  • Evaluates your finances to determine your eligibility for a pre-approval
  • Advocates for you in the negotiating process and helps assist you in creating the perfect financial offer on your home (alongside your Real Estate Agent)
  • Works to ensure that you’re getting the best possible experience so that you don’t have to stress more than you likely already are
  • Works with their operations staff to get your loan approved and get you to closing table 
  • Stays in contact throughout the years to act as an advisor and aide in situations such as refinancing, second homes, and more as your home and financial situation changes. 


A Loan Officer is the expert on the financial aspect of the home buying process. When you find your Real Estate Agent, ask them for recommendations on a trusted Loan Officer or do your research to find a Loan Officer who is right for you. If you find a Loan Officer first, they can help you find a trusted Real Estate Agent as well. Your Loan Officer is more than a voice on the phone demanding to have your credit score, they should be an ally in your home buying experience.


The Consult

Once you find both a Real Estate Agent and a Loan Officer let them help you. You shouldn’t go through this process alone and communicating everything to the professionals will help you remove any unnecessary stress.


The consultation is a no-pressure meeting where you get to know your Loan Officer and/or agent and they get to know you. Expect to answer questions about your work situation, your current financial situation, your financial goals, what your dream home is and more. These questions may seem invasive and personal, but the ability for your lender and agent to understand your wants and needs as well as your current situation is crucial to determining what the best path forward is for your home buying experience.


The Pre-Approval

You’ve probably heard this term thrown around before and have a vague understanding that it’s something you should have when you buy a home. But what is it? What’s the difference between a pre-approval and a pre-qualification? How do you get a pre-approval? Who should you get it from? Well let’s find out.


What is it? A pre-approval is an estimate from your chosen bank or lender on how much you will be approved to borrow for a home loan at a specific interest rate. This is received after a financial background check and can be used to show sellers you are a reliable and serious buyer. A pre-approval is not your final mortgage agreement, but the process of getting one is similar to your mortgage application.


What’s the difference between a pre-approval and a pre-qualification? A pre-qualification is the lite version of a pre-approval and holds far less weight with Real Estate Agents and potential sellers. This is a very rough estimate of what you could be approved for based on the information you provide yourself without official documentation and a soft credit check. A pre-qualification takes little time to complete whereas getting a pre-approval is similar to a final mortgage application and requires official documentation. The pre-qualification could help you to narrow down a rough budget while a pre-approval will give you a near-exact number on your home loan and help you win an offer on a home.


How do you get one? A pre-approval is something you get from your Loan Officer or lender. Today, most people can get a pre-approval through a short online process. If you prefer to discuss things face-to-face, many experienced loan officers will be able to tell you whether you could be pre-approved for a loan after a quick consultation. 


To receive your formal pre-approval letter, you’ll need to submit some documentation such as W-2 forms, your most recent pay stubs, bank statements, etc. Your lender will run through all your submitted documentation and pre-approve you for a specific amount, interest rate and loan program. This is NOT your final loan amount or mortgage agreement. This is an estimate and show of good faith in you as a borrower. 


Who should you get it from? When applying for a pre-approval, it’s important to consider where you’re getting one from. Not all pre-approvals are valued the same. Check with your Real Estate Agent for guidance on where to go for a solid pre-approval that will hold weight with a seller’s agent. It’s also a good idea to shop around to see what different lenders can do in terms of loan program and rate. Find the best one for you and go from there.


The first steps of the home buying process are all about research and preparation. Understanding your financial picture, assembling a strong home buying team of professionals, and getting your pre-approval will set you up for success. Once you have assembled your professional home buying team and received your pre-approval, it’s time to move on to step two; Finding your dream home!


Remember, knowledge is power and having power in the home buying process will help to create the best experience. Leave all your worry and stress at the door because with the help of your Real Estate Agent and Loan Officer, the home of your dreams is within reach.



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Q1 Recap

By Mikaylah Collins • April 12, 2023
We've begun to see signs that the Spring Market is here and could be robust! Here is what we know: According to NAR, home sales were up 14% in February over the previous month which marked the biggest monthly increase since July 2020. While March results are not yet published, the mortgage industry saw an increase in purchase applications for the 3rd straight month; a great sign for the housing market. Driving much of this activity is the stabilization of rates in January & February and lower interest rates this past month. We’re starting to see signs of a slowing economy and the markets are now pricing this in. This week we saw the 10-yr Treasury drop under 3.4%, a level it has not reached for quite some time and the lowest it’s been since September 9, 2022. This is great news for consumers as decreasing rates mean more home affordability. Over the past year, most markets have seen home prices stabilize if not even decline, albeit by a very small amount. This stabilization was still a relief for homebuyers as it helped to offset higher interest rates. As rates continue to decrease, we would expect home prices to again increase due to demand increases. In addition to increased demand, there is still a shortage of homes for sale nationwide and that will continue to worsen as more and more homebuyers enter the market.  So what does it all mean? Now is a GREAT time to buy a home! Rates and home prices are stable, there is not as much competition as there will be when rates do decrease, and buying a home is still extremely affordable for most. Once rates fall, we will likely see home prices rise and the competition for the shortage of homes will increase alongside it making the window of a buyer-dominated market very small.

Q1 2023 Market Outlook

By Sarah Rubin • February 10, 2023
We are well into Q1 and feel confident saying that the market appears to be stabilizing. Before we start looking forward, let’s quickly look back at the end of 2022.

Finding The Right Listing Agent For You

By Sarah Rubin • December 15, 2022
Buying a home is a huge investment and one we talk about often - BUT the flipside is that you have an opportunity to cash in on that investment when you’re ready to sell your home! While you do have the chance to cash-in, a lot more work goes into selling a home than you might think! If you are considering selling your home, working with a listing agent will help you market your home, negotiate with potential buyers, work through paperwork, and ultimately close on your home! So what is a listing agent? In its most basic terms, a listing agent is a real estate professional who represents the seller in a real estate transaction. The listing agent lists the home for sale and works on behalf of the seller to sell the home at the best price and terms for their client. Listing your home is a BIG deal and it is not a place to try and DIY. But why can’t you just grab a sign at Home Depot and try and sell yourself? Well, there are lots of reasons some of which include: Professional consultation: A listing agent will walk you through each step and tell you what to expect along the way! They should understand the specific community you’re in and the current market environment and will help you determine a competitive but realistic asking price for your home. Marketing and selling your home: Your listing agent will list your home on the multiple listing service (MLS) in order to better market your home to potential buyers. They also can make staging recommendations and hire a photographer to best show off your home and its features. They’ll schedule house showings, and can be present to answer any questions. Communication and negotiation: Communication is key to both buying and selling a home in order to minimize stress and misunderstandings. Listing agents take care of this important task, by staying in touch with interested buyers and their agents, fielding questions, handling paperwork, and negotiating the final sale price and terms. Recommendations: Seasoned listing agents might come with a list of professionals who they have worked with in the past that they enjoy working with in order to make the selling process smoother for you! Some of these professionals include: real estate attorneys or title companies, inspectors, stagers, those who specialize in home improvement AND of course trusted Loan Officers. How do I find the right listing agent for my situation? In order to find the right listing agent for you, make sure your agent is licensed and has experience, references, and a professional website where you can learn more about them and their qualifications. Most real estate agents work with both buyers and sellers, but some might specialize in one or the other. Once you find a few agents through referrals or online research, meet with them in person to ensure they meet your needs and work well with your personality. It is also important to ask questions during your meeting with them and it’s imperative that you determine what you’re looking for in an agent so you make sure you are happy with the product being delivered. Selling a home can be stressful, especially for first-time sellers. A listing agent can help by taking on some of the burden and providing the information and resources needed to help sellers make informed decisions. We work with agents on both sides of the transaction – if you have any questions or would like a recommendation for an agent in your area, please reach out to us!
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