Two Things to Do Before You Call a Real Estate Agent

It is tempting to start your home search by scrolling listings and calling an agent about the first house that catches your eye. But buyers who take care of two key tasks first usually have a smoother, less stressful experience. Those tasks are reviewing your credit and getting preapproved for a mortgage.

Step One: Know Where Your Credit Stands

Your credit history plays a big role in whether you qualify for a mortgage, which loan programs are available to you and what your terms may look like. Checking it early gives you time to fix problems before they affect your purchase.

How to Check It

You are entitled to free copies of your credit reports from each of the three major bureaus through AnnualCreditReport.com, the official site for free reports. Many banks and credit card companies also show a version of your score for free. Keep in mind that the score you see in an app may differ from the one a mortgage lender uses, but it is still a helpful guide.

What to Look For

• Errors: accounts you do not recognize, incorrect late payments or balances that are wrong.
• Collections or past-due accounts: items you may need to resolve or explain.
• High balances: using a large share of your available credit can pull your score down.
• Recent inquiries: a cluster of new applications can raise questions.

How to Improve It

If your score is lower than you hoped, do not give up. Many buyers improve their credit in a few months with steady habits:

1. Dispute any errors with the credit bureau that reported them.
2. Make every payment on time, every month.
3. Pay down revolving balances, especially on cards close to their limits.
4. Avoid opening new accounts while you prepare to buy.

Minimum score requirements vary by program. For example, FHA loans allow 3.5% down with a credit score of 580 or higher, which can help buyers who are still building their credit. A loan officer can tell you where you stand and what would make the biggest difference.

Step Two: Get Preapproved

A preapproval is a lender’s written estimate of how much you may be able to borrow after reviewing your income, assets, debts and credit. It is more meaningful than a quick online estimate because it is based on real documents.

Here is why it matters before you call an agent:

• You shop in the right price range. No falling in love with homes outside your budget.
• Sellers take you seriously. Many listing agents expect a preapproval letter with every offer.
• You can move fast. When the right home appears, you are ready to make an offer.
• You learn your options. Your loan officer can walk you through programs, down payment choices and estimated closing costs.

Choosing the Right Lender

Take your time picking a lender. Look for an experienced loan officer who explains things clearly, answers your calls and gives you straight answers. Read reviews, ask friends for recommendations and compare how different lenders treat you during the first conversation. You will rely on this person through closing, so trust matters.

Once you are preapproved, try to keep your finances steady. Avoid large new purchases on credit and keep saving, since your lender will typically review your file again before closing.

Then Bring in Your Agent

With your credit reviewed and a preapproval in hand, you are ready to find a real estate agent and start touring homes with confidence. If you are buying for the first time, our first-time home buyer page covers more of what to expect.

FLO Mortgage is a local lender that helps buyers get ready before the search begins. Contact our team to review your credit and start your preapproval.

This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.