Here are the steps to take in the process of getting pre-approved by a lender:
Select a lender (see below for considerations in choosing the right lender for you)
Call or submit and online pre-qualification request. You can do this with Finance of America Mortgage by clicking the "Get Pre-Approved" tab.
Your mortgage loan officer will discuss your credit with you and give you a list of items they require to complete the approval (i.e. Pay stubs, W-2s, Bank Statements, Etc.)
Gather the required documents and submit to your lender.
Your lender will then evaluate your credit, income and assets to determine if you are qualified for a mortgage. If so, your lender will then tell you what your maximum price range is based on your income and assets and issue a pre-approval letter for you. At this point, it's time to go house hunting with your realtor for that perfect house! Once you are ready to make an offer, your realtor will submit your pre-approval letter with the contract so that the seller will see that you are already approved for the financing.
You can read the bios for the two mortgage originators with our preferred lender, Finance of America Mortgage on our Meet the Team page. If you are ready to submit a pre-approval request with Finance of America Mortgage, click here for the online form.
Selecting a Lender. Although there are many choices out there for a lender, you will want to select carefully because not all lenders are created equal. Some things to keep in mind when selecting your lender are as follows:
- Trust – Find a mortgage originator (loan officer) that you trust. Ask a friend or family member if they can refer one that they have had a good experience using in the past. We have obviously worked with many lenders over the years and can highly recommend Finance of America Mortgage as our preferred lender. Talk to the mortgage originator and ask a lot of questions. Getting a mortgage is not as easy as it was a few short years ago and the originator needs to be easily accessible to you when it is convenient to you. Make sure that this person will be your guide throughout the entire process and will not pawn you off to their operations department.
- Programs – While there are much fewer programs out there today as compared to the pre 2008 era, make sure the lender has the program that you need. For example, if you are a military veteran, you will want to make sure that you call a lender that offers or specializes in VA loans.
- Accessibility – You will want to make sure that your mortgage originator is your advocate. You want them to be your guide throughout the process especially if this is your first time getting a mortgage. Ask lots of questions! Ask if they are available to you anytime, including evenings and weekends. For most people this is the biggest financial decision will make – you should choose to work with someone who has the time to make you feel comfortable and can answer your questions when you have them.
- Rates – These days interest rates tend to be about the same from lender to lender. Sometimes you will find a rate that is .125% lower or higher but for the most part, every lender has the same rates for the same programs. The reason for this is that most of the money for mortgages come from the same place – Fannie Mae and Freddie Mac. Since the mortgage meltdown in 2008 the majority of the money for mortgages comes from these Government Sponsored Entities (GSEs). The main exception is jumbo loans over 417k ($517,500 in some mid Maryland counties).
- Fees - can be a different story however. You see, some lenders will charge as much as $2,000 in processing, underwriting and application fees. Also, if a lender quotes you a rate that is much lower than another lender, make sure to ask what their fees are for that rate. Typically lenders will quote you a super low rate only to tell you later that the cost of that rate is 2 points (1 point = 1% of the loan amount). Although there are exceptions, we seldom recommend paying any points for a lower interest rate. Once you pay points, that money is gone because it is paid up front. That super low rate you hear advertised on the radio is likely to be very expensive up front. Most lenders can show you a super low rate with points, but the good ones will always advise against it.
- Local – Most banks are approved to lend in all 50 states. You may see and hear radio and TV ads from large lenders with super low rates. The truth is, all the money from mortgages come from the same place so we’ve all got just about the same rates. When you deal with a large out-of-state lender or bank, you will typically deal with one of their call centers. You may even deal with a different person each time you call and you will never get their cell number. If there’s nothing to gain by using an out-of-state lender, we recommend you stay local. Maryland lenders and loan officers know Maryland law inside and out and there is always something to be said about meeting someone in person.
My preferred lender is Finance of America Mortgage, LLC. Specifically the branch located in Westminster, MD. They are able to do business in several states however they specialize in Maryland and Pennsylvania. Although everything can be done over the phone and email, you can always stop in and meet with them in person. You can email them at email@example.com or call them at 443-487-4054.