Many clients ask me how early is too early to get a pre-approval.  The answer to that question differs depending on the scenario.  Generally, first time home buyers should get pre-approved earlier in the process than a seasoned homeowner.  There are times, though, when seasoned homeowners should also get pre-approves as early as possible.

First TIme Homebuyers

I suggest that first time homebuyers should start their pre-approval process one year prior to actively looking at properties.  A year may seem like it is too early to get started.  There are many reasons to start a year early.  With that year lag time, there will be plenty of time and opprotunity to work on improving credit and reducing debt to income ratio.  A year also provides time to save sufficient funds for down payment, closing costs and reserves.

There are 3 Primary Factors That Lenders Consider for Mortgage Approval

1 Credit

Each mortgage program has a minimum required credit score.  The minimum score varies depending on loan type.  The first step with credit is to ensure that you have the required minimum score.  In additon, to minimum score the lender will also look at overall credit history.

If you are below the minimum score, there are often steps that can be taken over the 12 month window to boost your score.  A year provides sufficent time to pay down debts.  Paying down debt and reducing your revolving usage rate is a great way to boost your score.  Twelve months is also enough time to remove any erronious collection or other negative accounts.first-timehomeownerspre-approvedfirst-timebeforeopportunitya ,first-time homebuyers start their pre-approval process one year before