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To get pre-approved for a home purchase in Oregon, you’ll need to follow a few steps:

  1. Check Your Credit Score

You can get pre-approved for a mortgage with a credit score as low as 580. However, the higher your credit score is, the better the loan terms will be.  Before applying, review your credit report and address any errors or outstanding debts. If you have questions about how to raise your credit score, give your lender a call. If your credit score is in need of serious repair it may be worth hiring a credit repair agency to assist you.

  1. Calculate Your Debt-to-Income Ratio

Lenders also consider your debt-to-income (DTI) ratio, which is the percentage of your gross monthly income that goes toward paying debts. To calculate your DTI ratio add up all of your monthly bills like housing payment, auto loans, student loans, credit card debt (use the minimum monthly payment), alimony or child support payments and other recurring monthly bills then divide that total by your gross monthly income.

  1. Gather Financial Documents

Prepare documents that lenders will need to assess your financial situation. These may include recent pay stubs, W-2 forms, tax returns, bank statements, and any other financial assets or liabilities.

  1. Research Lenders

Shop around for mortgage lenders in Oregon. You can consider banks, credit unions, mortgage brokers, or online lenders. Compare their interest rates, fees, and customer reviews to find the best fit for your needs.

  1. Submit a Pre-Approval Application

Contact your chosen lender to start the pre-approval process. You’ll need to fill out an application form and provide the necessary financial documents. The lender will review your information and determine the maximum loan amount you can borrow. Our recommendation is a local mortgage broker with Pico Mortgage Brokers, Cormac Reidy-Taylor, you can submit an online application on his website:

  1. Receive Pre-Approval Letter

If you meet the lender’s criteria, you’ll receive a pre-approval letter stating the loan amount you’re eligible for. This letter demonstrates to sellers that you’re a serious buyer and have the financial capacity to purchase a home. We recommend that you get a property specific pre-approval letter for each property that you submit an offer on, property taxes can vary a lot in Oregon and your lender will be able to give you the monthly payment details on each one. Getting a property specific pre-approval letter will also give you the best chance of getting your offer accepted. 

  1. Start House Hunting

Armed with your pre-approval letter, you can begin searching for homes within your budget. Real estate agents and sellers will take you more seriously when you make an offer with pre-approval in hand. If you are looking for an experienced real estate agent Vince Casey is an excellent local agent who can help guide you through the process.

It’s important to note that pre-approval is not a guarantee of a loan. Once you find a home and make an offer, the lender will conduct a thorough review of your finances and the property before finalizing the mortgage. Additionally, remember that the pre-approval letter typically expires after a certain period, usually either 90 or 120 days, so be mindful of the timeline when shopping for homes.