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The Crucial Reason to Get Approved Before You Begin Looking at Homes
Kayla Kallander
Today's guest blog is written by Kayla Kallander. Kayla brings with her over 19 years of banking experience to First International Bank & Trust. Originally from Walhalla, ND Kayla is a graduate of North Dakota State University where she holds a bachelor’s degree in Business Administration with an emphasis in Marketing. She is extremely passionate about her clients and ensures they receive elite service as she understands that home lending needs are one of the most important financial decisions a person will make. Kayla enjoys being active with fitness, traveling with her husband, and spending time with her four rescue dogs.
The internet has a way of pulling us into beautiful things. Stunning homes with kitchens to entertain, space for family, and a fenced yard for your pups pop up on your phone’s ads. You get excited and fall in love with a home you see online. Before you know it, your head starts spinning. “I can picture us there! This would be perfect for entertaining! It’s in the right school district.” Your realtor tells you that to make an offer you need an approval letter from a lender. In today’s market, you need a letter even before your agent will allow you to schedule a tour of the home. You scramble to call a lender, complete an application, and gather financials only to see the home sells. Do not let this be you!
Getting approved is not just an ‘apply online in five minutes and get a letter’ sort of thing. Sure, you can apply online and get a generic letter, write an offer, and get the home, but I bet you’d hate to find out weeks later that while digging deeper into your scenario the lender missed something in the rush of getting you approved so quickly. If you’re working with a quality lender, you will find that an approval can take time.
I always get asked, “Kayla, how long does it take for you to approve me?”. It truly depends on your scenario. It could take 24 hours or it may take 8 days. You might have a very straight-forward scenario, or you might have a complicated one. You might have had one job for multiple years with a salary with little debt and no employment gaps. Your money has been in the bank for months and your credit is excellent. In those scenarios your approval will likely take less time to be complete. On the flip side, you might have six businesses we need to document, collections needing proof of payment, a gap in employment or a commissioned job that we need to average your wages, so we need to get proof from your employer. In some cases, we might have to go back to your employer because something does not match the form they filled out versus what your check says. Ultimately, I look into everything that could and can come up along the way. When I am working to approve a client, the last thing I want is to rush to provide an approval and find out later I missed something. I would hate to have a client write an offer only to lose their earnest money deposit because we can’t do the loan.
So, what’s the next step and how do you move forward with approval? Here’s how!
- Photo ID
- 2 months asset statements
- Proof of payment or income for child support, alimony, social security
- 30 days Paystubs
- 2 years Tax Returns, personal and business
- Profit and Loss Statement, if you’re a business owner
- 2 years W2s
- Mortgage statement(s)
- Insurance dec page(s)
- Proof of large non-payroll deposits on your bank statements
- Proof of childcare
- 401k statement
Want to start the approval process?
I then pull credit and review your application in length. I review all of the items you provide and update your application to make sure it matches what you provide. In many cases I will order a verification of employment from your employer to prove what you’ve provided is accurate, and/or see bonus and commission history. From there, I determine which programs you’d qualify for. It’s then that I meet with you (zoom, phone or in-person) and we walk through your file. We discuss your budget and how that compares to what you’re approved for. I share with you the pros and cons of each program, how much you put down, closing costs, rate options, down payment assistance options, etc.
Your homework is now done up front and this will make your offer stronger! You know what you can afford, and you know what your payment and out-of-pocket expenses looks like. I love to be able to call up a listing agent on the home you’re offering and explain that your approval looks good! We’ve done what we need to up-front!
Buying a home is a big investment and it can be very emotional! I want you to have the best experience and the least amount of stress. If you want to buy with confidence, get your approval done early on. You’ll thank me later.
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