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Get mortgage approval first, avoid disappointment

RIO RANCHO, N.M. — Q: I’m ready to buy a house and I called a Realtor to see some houses but he said he wouldn’t show me any houses until I get approved for a mortgage. Why can’t we just start looking and then I can get approved once I find something?

Talia Freedman

Talia Freedman

A: I get it. It’s hard to get excited about the boring process of getting approved for a mortgage when you don’t even know if there are houses out there you like. The problem is, you also don’t how much you can afford or if you’ll get approved for a mortgage. So, you could get out there and start looking, but how would you pick a budget? How would you know what you can buy? What would you do if you found the house of your dreams and then found out you’re not approved for that amount and can’t buy it?

Some Realtors are more forgiving about this point than others, and it usually has to do with how busy they are. If you found someone you like and with whom you want to work, then trust that instinct and go ahead and get approved. The one thing you can do in advance of that is think about how much you can afford per month. Then go to a mortgage calculator site (I like bankrate.com) and see how much that gets you in a mortgage. Don’t forget to add at least a few hundred dollars per month for taxes and insurance to the payment. Then you can start looking online and see how much how that gets you and where. It’s a good exercise and will help you narrow down the search. You could even pick a few houses to drive by or go to a few open houses. But don’t be mad at your Realtor. He doesn’t want to waste his time, but he also doesn’t want to get you excited about houses before knowing if you can buy one.

So, I know it’s mundane. I know it’s not the most fun part of the process but go ahead and call a mortgage lender. Confirm you’re approved for what you feel comfortable spending per month and then get out there and look. Being armed with an approval is empowering. After all, as soon as you find the house you like, you’ll be able to move forward with making an offer.

Talia Freedman is a Realtor with Signature Southwest Properties.

 

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