Shop For House First or Mortgage First?

18 April 2005, Reviewed November 12, 2008

"I am planning on buying a house for the first time… Should I shop for a house first and then a mortgage, or the other way around?"

This question has a catch-22 flavor to it because some lenders want to see a contract of sale before they process a mortgage application, while some home sellers want to see a mortgage commitment before they show you their house. The dilemma is more apparent than real, however.

What a careful house seller wants is assurance that you have the financial capacity to complete the purchase. You can provide that with a mortgage pre-approval – a statement by a lender that it is willing to make a loan to you of a certain size or that carries a certain payment. You don’t need to shop for a pre-approval, because the price of the loan is not specified. Further, you only need one pre-approval. See Mortgage Pre-approvals In a Tight Market.

Once you have signed a contract of sale, you shop for a mortgage. The target of your mortgage shopping is a firm price commitment or "lock". You are in no way obligated to take your loan from the lender who provided the pre-approval. In all fairness, however, you should include that lender among those you shop.

Want to shop for a mortgage on a level playing field?

Why Shop for a Mortgage with the Professor?

  1. Receive His Help in Finding the Type of Mortgage That Best Meets Your Needs
  2. Shop Prices Posted Directly by His Certified Lenders
  3. Shop Prices Fully Adjusted to Your Deal
  4. Shop Prices That Are Always Current
  5. Get Him as Your Ombudsman Just in Case

Read More About the Support and Protections Listed Above

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