Here's a quick look at the home-buying process, including estimated timelines, to help you prepare for your purchase.
Mortgage pre-approval
While it may be tempting to start house hunting right away, the first step should be getting pre-approved for a mortgage through a lender or mortgage broker. This might not sound as exciting, but it’s a crucial step. A mortgage broker will assess your financial situation, including your income, savings, credit report, and debts, to determine how much you can afford to spend on a home. This will help you set a realistic budget and keep your search on track.
Pre-approval can take anywhere from several days to a few weeks, depending on your financial circumstances and the workload of your mortgage broker.
Remember, you’re not obligated to accept the first mortgage offered to you. Interest rates, terms, and lender conditions can vary, so it’s wise to shop around and find the best deal.
How to get pre-approved faster
To expedite the pre-approval process, focus on improving your credit score and paying down outstanding debts, including credit cards and student loans. While it might not be possible to pay off all debts entirely, even making partial payments can increase your chances of loan approval.
Start early
When lenders review your credit history, they want to see that you are a reliable borrower. One way to build trust with lenders is to maintain a diverse financial portfolio and a solid credit score. Consider taking on additional lines of credit, such as a credit card, and make timely payments to boost your credit score. This strategy can help speed up the pre-approval process and may also qualify you for lower interest rates on your mortgage.
Every buyer’s situation is a little different. If you want help understanding how pre-approval fits into your bigger home-buying timeline, I’m always happy to chat and help you get organized before you take the next step.