Last Updated on February 27, 2024 by Luke Feldbrugge
You’re a REALTOR® or real estate agent, and mortgage lending is not your thing, but supporting your clients through the mortgage pre-approval process is an important role. Understanding the essential steps and tasks involved shows your commitment to assisting your clients. This mortgage pre-approval checklist for agents offers tips and insight on how to build a custom checklist to support clients through the mortgage pre-approval process, highlighting necessary steps to ensure a seamless path to mortgage pre-approval.
Key Takeaways
- Establish a partnership with a lender to enhance client services.
- Customize the checklist to align with your business and client needs for a tailored experience.
- Be a supportive voice to help guide clients through financial readiness, credit, affordability, a pre-approval letter, choosing the right mortgage, and maintaining financial stability.
- Empower clients with actionable advice at each step to confidently navigate the mortgage pre-approval process.
Partner with a Lender
This goes without saying. If you haven’t already, establish a strategic partnership with a local mortgage lender who aligns with your values and business strategies to elevate your services and expand your referral network.
By co-branding a mortgage pre-approval checklist with a trusted lending partner, you not only provide valuable resources to your clients, but begin to facilitate their mortgage pre-approval process by recommending your partners services. This will likely strengthen your credibility as a knowledgeable and resourceful real estate agent.
In return, this collaborative approach not only enhances the home buying experience for your clients but also fosters long-term partnerships that expand your referral network.
Customize Your Checklist to Fit Your Business
While there are fundamental elements to include in any mortgage pre-approval checklist, aligning it with your unique business practices, any strategic niches (like joining Homes for Heroes), and your brand’s identity can enhance its effectiveness and relevance.
Nearly every lender operates with slight variations when it comes to pre-approval requirements. Therefore, it may be a good idea to customize several versions of your mortgage pre-approval checklist for each of your preferred lenders. By adding specific document requirements and procedures relevant to each preferred lender, you ensure that your clients are equipped with accurate and comprehensive steps for their pre-approval process. This reinforces your commitment to deliver tailored solutions and exceptional service.
In addition, leveraging your branding elements such as logo, colors, and messaging further reinforces your professionalism and brand consistency, further building trust and recognition among your clients and partners.
By customizing your checklist, you position yourself as a proactive and attentive real estate professional dedicated to facilitating a smooth and successful home buying journey for your clients.
Leverage a creative and graphic design tool like Canva to help build an appealing one-sheeter mortgage pre-approval checklist as outlined below.
Mortgage Pre-Approval Checklist for Agents
This mortgage pre-approval checklist for agents outlines important, but general steps for your clients to take so they can effectively get through the pre-approval process. If you’re looking for more insight on the pre-approval process and how we present it to our heroes, you can always check out our post on everything you need to know to get pre-approved for a home loan for more ideas to incorporate into your checklist.
1. Determine Financial Readiness
Before diving into the home buying process, it’s essential for your clients to understand their finances and whether they are in a place to take on the responsibilities of a mortgage. A mortgage pre-approval helps assess their ability to afford a home by analyzing their income, debts, and assets. By obtaining a pre-approval, clients gain insight into their purchasing power and can confidently submit a purchase offer on a home. Plus, home sellers want to know the buyer can afford their home and typically prefer to have a home buyer’s pre-approval confirmed before even considering an offer.
Advice/Actions to Provide Your Clients:
- Gather necessary financial documents, including pay stubs, tax returns, and bank statements.
- Calculate monthly income and expenses to determine affordability.
2. Credit and Credit History
Credit plays a significant role in the mortgage pre-approval process. Mortgage lenders evaluate a client’s credit score and credit history to assess their risk as borrowers. A higher credit score typically translates to lower interest rates and better loan terms. Educate your clients on the importance of maintaining good credit habits and addressing any issues that may negatively impact their credit; especially during the home buying process.
Advice/Actions to Provide Your Clients:
- Obtain a free copy of your credit report from major credit bureaus.
- Review the report for errors or issues.
- Pay bills on time and keep credit card balances low.
- Guide clients to preferred lenders for additional services and advice.
3. Determining Affordability
Affordability goes beyond just the purchase price of a home. It encompasses various factors, including down payment, monthly mortgage payments, property taxes, insurance, and other recurring expenses. Helping your clients understand their affordability can prevent them from overextending financially and ensure a comfortable homeownership experience.
Advice/Actions to Provide Your Clients:
- Have clients calculate the maximum affordable purchase price based on income, expenses, and debt-to-income ratio.
- Make aware of down payment and down payment assistance programs available.
- Get a ballpark estimate of monthly mortgage payments using online calculators; and remind them to factor in additional expenses such as property taxes, homeowners insurance, and maintenance costs.
4. Pre-Approval Letter
A pre-approval letter is a formal document issued by a lender indicating the amount your client is qualified to borrow for a mortgage. This letter demonstrates to sellers that your client is a serious buyer with financing in place, potentially giving them a competitive edge in a competitive market. It’s a crucial step before making an offer on a home.
Advice/Actions to Provide Your Clients:
- Submit a pre-approval application with a mortgage lender.
- Await lender’s review and approval process.
- Obtain pre-approval letter specifying the approved loan amount and terms.
5. Determine the Right Mortgage
Your clients will need to work with a mortgage lender to help determine the right mortgage product that suits their needs and preferences. There are various types of mortgages available, each with their own advantages to consider.
Advice/Actions to Provide Your Clients:
- Compare mortgage options, including fixed-rate, adjustable-rate, FHA, VA, and USDA loans.
- Consider factors such as interest rates, loan terms, and down payment requirements.
- Provide guidance on selecting a reputable lender with a track record of excellent customer service.
6. Maintain Financial Stability
Even after obtaining pre-approval, it’s crucial for your clients to maintain financial stability throughout the home buying process. Any significant changes to their financial situation could impact their eligibility for a mortgage or loan terms. Encourage your clients to avoid making large purchases or taking on additional debt until after closing on their new home.
Advice/Actions to Provide Your Clients:
- Refrain from changing jobs or making career moves during the home buying process.
- Discourage clients from opening new lines of credit or making large purchases on credit.
- Remind clients to continue making timely payments on existing debts and bills.
- Emphasize the importance of communication and transparency with their mortgage lender throughout the process.
Mortgage Pre-Approval Checklist for Agents’ Support Role
By following this comprehensive mortgage pre-approval checklist for agents, you can empower your clients to navigate the mortgage and home buying process with confidence and ease. Each task outlined in the checklist serves a vital purpose in ensuring that your clients are well-prepared and financially equipped to make one of the most significant investments of their lives. By providing guidance and support every step of the way, you can help your clients achieve their homeownership dreams while building trust and loyalty in your professional relationship.
Join Homes for Heroes – Be the Agent Heroes Want
Homes for Heroes can help you specialize in your market and grow your real estate business by helping your local heroes buy, sell or refinance a home. You can offer them something special, something beyond the transaction, by saving them significant money as a way to thank them for their service.
Simply submit your registration and schedule a time to learn more about the benefits of being a Homes for Heroes local market specialist, and become the agent or lender your community heroes want to work with for their home and mortgage needs.
