Getting pre-qualified, in plain words
This is the step people skip, and it is the one that decides everything after it. Twenty minutes on the phone tells you what you can actually buy, which changes which houses are worth your Saturday.
I am not a loan officer and I do not get paid if you use one person over another. What follows is just the order this goes in.
What pre-qualification is, and what it is not
Pre-qualification is a loan officer looking at your income, your debts and your credit and telling you roughly what you can borrow. It is a conversation and a soft look at your file.
Pre-APPROVAL is the next step up: they verify the documents and write a letter. That letter is what a builder wants to see attached to a contract, and it is what makes an offer real.
Neither one is a commitment to lend. The final answer comes after an underwriter has looked at the whole file and the house has been appraised. Anybody who tells you otherwise is overselling it.
Why it comes before touring, not after
Because the price on a card is not the thing you are deciding. What you are deciding is a monthly number, and that number depends on your credit, your down payment, the taxes on that specific homesite and what the insurance comes to. Two houses at the same price can land in very different places.
And because of how new construction works. When you walk into a builder's sales office, the first thing they do is ask whether you are pre-approved and who with. Turning up without an answer puts you at the back of the queue on anything that is in demand.
There is one more reason, and it is the one I care about. If you visit a community on your own, the builder registers you to their own salesperson, and from that point I cannot represent you there. Text me first — it costs you nothing and it keeps your options open.
What to have in front of you when you call
- Pay stubs — The last 30 days. If you are paid twice a month, that is two of them.
- W-2s or 1099s — The last two years. Self-employed is two years of full tax returns instead, with every schedule.
- Bank statements — The last two months, every account, all pages — including the blank ones. Underwriters ask for the missing page every time.
- Photo ID and your Social Security number — Standard identity verification.
- A rough number for your down payment — And where it is coming from. Money that arrived recently has to be explained, so a gift from family is worth mentioning early rather than late.
- Anything unusual, said out loud — A past bankruptcy, a short sale, a gap in employment, a collection you forgot about. None of these is necessarily a problem. All of them are a problem if they turn up in week three instead of on the first call.
Who to call
You can use any lender you like, and plenty of buyers use their own bank or credit union. It is worth getting more than one answer.
There is also the builder's preferred lender. The reason buyers use them on new construction is that the builder's incentives are usually tied to them, and the two sides are already talking to each other about the same house. Whether that is the better deal for you depends on the numbers, which is a comparison worth making rather than assuming.
Tell me where you are and I will point you at the right conversation. If you would rather I just answered questions first, that is fine too.
Want me to start you off?
Leave me a number and tell me roughly where you are. I will come back to you, usually the same day.