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If you’re starting to house hunt, you may have faced the question ‘are you pre-approved?’ While it might seem like it’s too soon to be pre-approved, after all, you’re just looking, we think it’s never too soon to get pre-approved. It has multiple benefits to helping your home search, and can prevent you from losing out on the home of your dreams. Here’s why it’s so important.

Pre-qualified and pre-approved

Yes, there is a difference between being pre-qualified and pre-approved, and it’s important. Being pre-qualified means that an estimation has been done on how much a lender thinks you can afford to spend on a monthly mortgage. This isn’t final and it’s not set in stone. Your final loan approval only happens when you have the property you want to apply a loan to, and you have the appraisal completed.

If you’re pre-approved, a lender has checked your credit score and your documentation, and you are approved for a specific type of mortgage or loan, if you need it. It’s good to know that being pre-approved only lasts for 90 days in some states, so if you’re still really far off from looking at homes, it actually is best to wait.

Being pre-approved also shows good intent to buyers. If you’re looking at a home, and the buyer knows that your pre-approved it shows that you’re that much closer to making an offer, and that you’re not just looking around for the fun of it or to see what the competitive market is like.

Pre-approval

If the time is right, and you’re ready to get pre-approved, it’s time to schedule a meeting with a lender. Talk to your local Bend Oregon Realtor, and they’ll find you the right lender. You’ll need to bring proof of your income for the last few years, W-2’s or pay stubs. Also bring bank statements, investment statements and anything else you would need to prove that you have enough money for a down payment, closing costs, fees, etc.

Lenders want to make sure they’re loaning money to someone with stable employment so bring proof of employment. If lenders loan to people that have stable employment, it increases the odds of the loan being paid back in full, which is the end goal of the loan.

Check your Credit

It’s really important to know that even if buying a home is on the distant horizon, now is the time to start working on your credit score. Credit takes time to improve, and it’s crucial to what kind of deal you get on a loan or mortgage. Be sure that your credit is acceptable for a loan, and make sure it stays that way. Again, a lender can help with this, what you should do and how to improve your score if it’s lower than it needs to be. Find a great lender through your Bend Oregon Realtors.

Getting pre-approved is a great idea if you want to be proactive about your home search. It’s always best to be pre-approved so you can be ready to make an offer if you find the perfect home or property.