In my latest YouTube video you will learn everything you need to know about the mortgage pre-approval process, including what it is, what it means, what it looks like, what you'll need, and everything in between. Shop for your mortgage before you shop for your home by going through the pre-approval process!
I absolutely love this topic because it's SO IMPORTANT! Most people go and shop for their home first, and only after finding one they *think* they can afford, do they then apply for the mortgage. WRONG! WRONG! WRONG! Shop for your mortgage first, go through the pre-approval process and learn what you can actually afford before falling in love with a house or investing time and money into a home you can't afford.
✨ Download your copy of the Home Loan Short Checklist here: Home Loan Short Checklist
That to me is absolutely heartbreaking to get that far in the process and realize, "oh my gosh, this is not what I thought."
And some people still proceed because they feel like it's too late. And it may be.
Gotta talk to your realtor about that.
But other people, then they back out and they've lost all this money. And maybe even are in breach of contract and a whole nother thing that's out of my wheelhouse. Mortgage preapproval process. I am so glad that you asked.
I want you to stay tuned to the end of this video so you can find out the sequential steps that you need to take to protect yourself because you should actually shop for your mortgage before.
I said that right.
You should shop for your mortgage before you shop for your home.
Definitely, definitely, definitely. So stay tuned to find out why.
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My name is Stephanie Weeks and I am a 16-year loan officer and I've helped thousands and thousands of customers with their financing.
And out of 300,000 loan officers in the U S, I've been named in the top 1% in loan production in the past several years.
And for 2019, I just got the notice here mid-2020 that I also made the Scotsman Guide for the top originators as well.I'm excited about that because I am here and creating this channel and creating these videos so that I can share my knowledge with you, the consumer, to help you get the best deal and have the best mortgage experience that you can and get the loan that you deserve.
Can I be frank?
No, I think I'll stick with Stephanie. But seriously though.
I wanna be direct and say that some things that really, really, really suck are paying for an inspection on a home you don't close on, paying for an appraisal on a home that you don't close on, putting down deposits on homes that you don't close on or getting denied for your loan.
That really sucks.
Or how about closing, but not getting the mortgage you wanted, you thought, the payment you thought, or the cash out of pocket that you thought, right?
Those things totally suck.
That is why I'm creating this video to help you with the right steps to get the right mortgage
before you shop for that right home.
So what is the preapproval and what does that mean?
What does it look like and why should it come
before finding the house?
That's what you're gonna find out today.
Are you ready to dive in? Because I am. I absolutely love this topic.
So the first thing I'm gonna touch on today is what is preapproval versus pre-qual.
I don't like pre-qual. I don't agree with it. I don't know if other lenders even do it anymore.
What a pre-qual man's is you say,
"Hey, this is my income. These are my debts. This is what I wanna spend. Do you think that that looks okay? Do you think that's going to work? Here's what my credit score is."
Oh my gosh. It gives me anxiety just saying those things, because the credit scores that you pull and what the lenders pull, two different things.
The way that we calculate your income can vary even just by loan program.
So there's no way you're giving us the right income.
Your debts. We have to calculate your debts and minimum payments, different ways with different things, like student loans are handled, different ways with different programs.
If you have like an Amex, that you pay off every month, or 30-day charge accounts. Those are handled differently.
There's different options with that.
So and then plus, you know, people forget all the time debts that they have.
Hey, I've got $500 a month in debt.
And what does this look like?
And then you forgot that you've got a $25 minimum payment card on whatever account, right?
And that can make a difference.
So pre-qual is where you just verbally give some information.
The lender verbally is like, eh, seems like it'll work.
And that is a pre-qual. I don't like it. I don't suggest it.
I don't like wasting people's time, or money, or potentially putting them at a disadvantage, which is why I like a preapproval. So let's talk about that.
A preapproval is when you actually have a full application submitted to a lender.
We're allowed to pull and analyze your credit report.
We look and analyze your debts, your minimum payments.
We calculate your income that you provide based on how we can calculate income with different programs. And then we look at what do you wanna spend?
What do you want your monthly payment?
Where do you want your cash to close?
And we kind of put together a little package, if you will. And that makes more sense because we know we're looking at the right minimum payments.
We know that we're asking you specifically what your income is.
Not you just saying I make five grand a month.
But how are you paid?
Is it hourly? Salary? Base? Bonus? Commission? Combination? Day rate? Right? Mouthful, yes.
We need to know that because each different line item is handled and calculated differently and has different requirements.
So part of that preapproval is that good detailed application where we can look at the credit score, the credit report, the credit history.
We can look at your capacity to pay.
We can calculate your debt to income accurately.
We can look at programs that you might fit into and programs that you might prefer one over the other, and actually issue a preapproval that is strong.
And that is gonna help you secure an offer better than if you just had a pre-qual.
Hope that makes sense.
Drop me a comment if you have questions about that or if something doesn't make sense.
I am absolutely happy to answer that.
Does your credit have to be pulled?
Well for a pre-qual, no. But for a preapproval, yes.
For a true and valid preapproval, your credit report does need to be pulled and analyzed. Will I get a preapproval letter?
That's a great question that people ask. So I'm not sure.
There may be lenders out there that will issue a pre-qual letter.
I'm not one of them.
When get a preapproval, yes.
You can get a letter of preapproval that lets the seller and the realtor know that you have been for you approved and you are a serious, valid potential buyer of that property.
Will a preapproval letter make your offer stronger? And I believe an absolute yes.
I'm not a realtor. Realtors are amazing. They're very valuable.
That's something you could ask the realtor that you're working with, but I do truly, truly believe that a preapproval letter,
especially a good strong preapproval letter is definitely gonna give you a leg up on the next person that might be also offering on that same property.
So here is the big finale.
The big question you've been waiting for.
Why should you shop for a mortgage before you shop for a house?
You're shopping for a mortgage before you shop for a house for actually a lot of reasons.
When you go to buy a property, most of the time you're going to be making an offer.
You're going to negotiate back and forth.
When the offer is accepted, you're gonna give a good faith deposit.Most of the time, you're not required to get a home inspection. I always 100% suggest that you 100% get a home inspection.
So you've got the first check you wrote, which is the deposit we just talked, about also called earnest money, good faith deposit.
Then you got the second check and that is going to be the inspection if you choose to do that.
And that amount varies just like the deposit varies.
So then the next thing that goes into that is you're gonna move forward on the loan if you're cool with the inspections and then negotiations of those inspections.
And the third check you're gonna write is for an appraisal.
So then that's when the loan really gets going hot and heavy, right?
And so you're three checks in.
And I don't know about you, but every dollar counts.
And we work really hard for our money, especially these days.
So that makes a difference. Any money you've spent is important to you.
You worked hard for that.
So those three checks you've already written, heaven forbid after you've written those three checks, you are now weeks into the process.
You realized that home does not have a monthly payment in the range that you were hoping.
It does not have a monthly payment what you were expecting.
The down payment?
Maybe more than you thought it was or you were gonna be required to put.
The cash out of pocket, which includes down payment, if any, plus closing costs, plus prepaid items, let's say those numbers came in higher and that's more than you were hoping, you were anticipating, or you're comfortable with.
You know, even if you have that money in the bank doesn't mean you wanna use it? Right?
So that to me is absolutely heartbreaking to get that far in the process and realize, "Oh my gosh, this is not what I thought."
And some people still proceed because they feel like it's too late.
And it may be. Gotta talk to your realtor about that.
But other people then they back out and they've lost all this money and maybe even are in breach of contract and a whole nother thing that's out of my wheelhouse.
But my point is that it's very important that you spend your money safely, that you don't waste your hard earned money.
And when you shop for a mortgage before you shop for a house, you're saving yourself the risk of that heartache and that lost money because when you shop for a mortgage and get a nice valid preapproval, you should be leaving that conversation with a good idea of what that payment might be.
What about with that cash to close might be.
And if those numbers are at $250,000, let's say,and you realize in that beginning conversation that you really should spend closer to $200 because that's gonna fit your needs even more, you do not wanna discover that after you're under contract on the house for $250.
Just my two cents, but as always trying to spread mortgage peace, wanna save you guys any money, time, and heartache that I can.
And that is why I always, always say, and truly, truly believe that you should get preapproved and shop for your mortgage before you shop for your house. My free gift to you today is going to be in the comments below.
There's gonna be a link in the bio or comments, wherever we can fit it in there.
And that's going to be your home loan short checklist.
And that's my short version of the checklist of the things that you can expect to have to produce most of the time when obtaining mortgage financing.
Check it out below.
Are you there?
I would love for you to engage with me. Type a big yes in the comments below.
I want it all caps I want it in quotations, yes, if you have learned from this video and you will be preapproved before shopping for that perfect house.
If you enjoyed the video, please, please, please subscribe to the channel, hit the bell to be notified.
Give me a big like. Really appreciate that.
I appreciate any and all comments. I always answer any questions that are listed in the comment personally.
So I look forward to hearing from you guys.
I'm gonna drop some other videos with some links so you can check those out as well. Hope you enjoyed.
Please connect with me on social media.
My insta handle is @_therealStephanieWeeks. My website is http://www.stephanieweeks.com.
Every year an average of 21 million people apply for mortgages in the US, and only around 7 million close. I'm on a mission is to change that by spreading mortgage education. Sign up for my newsletter to be a part of my Mortgage Peace Movement!