Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Private Lending & Conventional Mortgage Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 7 years ago on . Most recent reply

User Stats

6
Posts
1
Votes
Jon Graham
  • PA
1
Votes |
6
Posts

Should I get pre-approved before locating any deals?

Jon Graham
  • PA
Posted

Hi,

I am new here so many apologies if this has already been answered in another blog post or forum post, but is it necessary or a good idea to get pre-approval for purchasing a property prior to searching for a deal? I am going to do the homework and run the numbers so I will know if I can afford the property and if it will cash flow, however I want to know how much a bank would be willing to provide me as well as a rough estimate of the interest rate I would be getting.

My strategy is buy and hold and I am targeting multi-family (duplexes and triplexes). Lets say I have $20,000 for a down payment plus another $15,000 for renovations and another $5,000 for closing costs. I am planning to get a traditional mortgage through a bank so I would need 20% down which means I would like be targeting a maximum home price of $100,000.


Do I need to provide a bank with any further information than this or can I just walk into a bank, ask to be pre-approved for a mortgage financing on an investment property, and give them that short list of information? Is there any other information I would need to provide them (other than information such as my income and debt)? Is this even the recommended pathway for this amount of money?

Thanks and again I am sorry if this has been answered 100 times before,

Jon

Most Popular Reply

User Stats

6
Posts
1
Votes
Jon Graham
  • PA
1
Votes |
6
Posts
Jon Graham
  • PA
Replied
Originally posted by @Jay Helms:

@Jon Graham - essentially a pre-approval is a soft-credit pull, meaning the bank is really going to just look at your credit score. You won't receive a conditional approval until they pull a hard credit and look at everything. 

If you have a lender in mind, you'll also want to know what they require your DTI (debt-to-income ratio) to be.

Hi Jay,

Thanks a lot for that clarification. I don't have a specific lender in mind just yet, but I am considering a few local banks. I was thinking to go and speak with them to talk about my plans and just get a conversation started with some lenders. In these discussions I was planning to bring up pre-approval amounts so I wanted to see if this was worthwhile and something I need to consider. I had not thought to ask about their DTI requirement so that is a great piece of information.

Thanks again,

Jon

Loading replies...