When Should You Start the Mortgage Pre-Approval Process?

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In this tutorial video, we'll go over when home buyers should begin the mortgage pre-approval process.

We'll explain how it might make more sense to first just get a mortgage pre-qualification letter if you're earlier on in the process, just to get a sense of what you can borrow and what your realistic budget should be.

A further benefit is you won't have your credit pulled (i.e. a hard credit pull) and you can get a mortgage pre-qualification letter in as little as 15 minutes via a phone call with a mortgage banker or broker. You won't be expected to hand over any documentation for this, and the bank is essentially giving you a sense of what they'd like to you, loosely, based on what you told them verbally about your assets, liabilities and income.

Once you're more serious about buying, and say you've decided that you want to start making offers within the next couple of months, then it's a good idea to get started on the mortgage pre-approval process so you can be taken seriously by sellers and listing agents.

For example, it's often easier to get showings at hot listings when your buyer's agent can say that you're already pre-approved for a mortgage. Furthermore, when you submit an offer, it's much better to attach documentation such as a pre-approval letter to back-up your offer if you intend to finance or require a financing contingency.

Please note that a mortgage pre-approval letter typically requires a hard credit pull, i.e. something that will show up on your credit report. However, if you shop around at a few different lenders and have your credit pulled by various lenders for the same type of loan within a short period of time (i.e. say 30-45 days), then most lenders won't count it against you as it'll be obvious that you were shopping around for the same loan.

However, this shines a light on the obvious danger of getting your pre-approval letter too early. You'll have to explain why your credit was pulled months ago and attest that you didn't take out any debt as a result of it. Plus, mortgage pre-approval letters do expire, so you'd probably have to refresh it months later anyway!

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Hauseit Group LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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