00:00Welcome to the second episode of the First Time Homebuyer series.
00:03In this video, I'm going to go through what it means to get pre-approved and how to prepare.
00:07My name is Leah, I'm a Massachusetts realtor,
00:10and I simplify real estate to help you achieve your dream life faster.
00:14If you haven't watched the first episode in the series,
00:16it's all about selecting an agent and what you deal with in that process.
00:20So definitely go watch that if you haven't already and come back.
00:23Okay, so you found yourself a real estate agent.
00:25Now what you want to do is get pre-approved by a mortgage broker
00:28if you haven't already.
00:30In simple terms, a pre-approval is like an assessment the lender does
00:34to help figure out how much money they're willing to let you borrow to buy a home.
00:38So it's extremely important to get pre-approved before you start your house hunting journey
00:42because you want to narrow down the exact price range that makes financial sense for you
00:47so you don't waste a bunch of time looking at houses that might not work.
00:51So the first thing you're probably going to want to do is to check your credit score.
00:55You want to know where you stand before you reach out to a lender.
00:58So a credit score of at least 620 is recommended to qualify for a mortgage.
01:04But if you can get a higher like 740 or above,
01:07it can qualify you for even better mortgage rates.
01:10Now you'll definitely want to get your credit score as high as you can
01:13before embarking on the home buying journey.
01:15But if you have a lower score, there are lenders out there
01:18that specialize in helping people with lower scores buy.
01:22So definitely look into it.
01:23The next thing on the list is to review your credit history.
01:27Request any credit reports, fix your errors,
01:30make sure everything is resolved before applying.
01:32Next is to calculate your debt to income ratio or DTI.
01:36This is a percentage of your monthly income that goes towards paying your debts
01:40like your credit card, student loan, car payments, any of those things.
01:44So you can go to a website called nerdwallet.com.
01:48They have a calculator there that can estimate your DTI.
01:51So documents you'll need to provide to get a pre-approval letter include
01:55a W-2 tax form or 1099s if you have any additional income.
01:59Lenders prefer two years of continuous employment, but there are exceptions.
02:03You know, if you're self-employed,
02:04you'll have to provide two years of income tax returns.
02:08So I'm just trying to summarize things for you
02:10so you have an idea of what you need to prepare.
02:12But again, I am not a lender.
02:14I am a realtor.
02:15The lender will take care of all this with you.
02:17They'll let you know exactly what you need.
02:19So if you just want to have a conversation with one,
02:21I have my favorite that's super reliable
02:23that I've done business with multiple times.
02:25So I can definitely connect you to them.
02:27And I have many other amazing recommendations as well.
02:31You want to make sure you work with a really good mortgage broker
02:34because if they're not on top of their things,
02:37it'll really slow you down and give you a massive headache.
02:39So this is a really crucial aspect of the home buying journey.
02:42You want to be set up with the right person.
02:44So if you're looking to buy, sell, or invest in Massachusetts,
02:47or you're looking to move out of the States,
02:49do not hesitate to reach out to me.
02:50I have the connections for you.
02:52And all I want is to make your journey as smooth as possible.
02:55Don't forget to like, comment, and subscribe if you found this helpful.
02:59And stay tuned for the next episode in the series
03:02all about the house hunting journey.
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