Do not call a Realtor unless you have done this first, I am serious. I am about to give you the #1 thing you must do before you make that first call to see homes.
True story in 2018. You see a wonderful home on line. It has everything you want, a pool, 4 bedrooms, a fenced yard, on a cul-de-sac, stunning landscaping, it has a true WOW factor. You call a real estate agent and ask to see the home and BAM, you are told that you cannot see this house without a pre-approval from a lender.
This is how it is now. Those wonderful homes go quickly and sellers are asking for a pre-approval letter from a lender. It gets worse. 5 offers come in on this wonderful home and 4 of them have a pre-approval letters and one is a cash buyer. You don’t have a chance of pulling this deal together without a pre-approval letter, and guess what? The cash buyer’s offer may not be the one the sellers accept. Cash may be king but the offer may not be strong enough. Your offer will be turned upside down and left out of the offer pool so to speak.
Don’t shoot yourself in the foot. The house is wonderful. It has everything you want, everything you have dreamed about, and a professional kitchen too.
Get a pre-approval letter.
Let me share three reasons why this is a must.
But first I have a warning: A pre-approval letter is very different from a pre-qualification so skip that idea immediately. Go for the real thing.
Talk to a lender and gather everything together that the lender requires.
How is your credit report? Check it for errors.
A pre-approval is not a loan commitment, but it will help speed things up when you have an accepted contract.
There are the reasons you need one:
No. 1: The competitive market
You are a buyer, you want to see that wonderful home right now.
However, if you are truly serious then having a pre-approval in your possession gives you leverage.
No. 2: No preapproval, no accepted offer
and loan professionals say it’s common to come across buyers who skip the preapproval process.
Sellers are smart, they are asking for one with your offer. No pre-approval, no deal.
No. 3: You need to know where you stand
A pre-approval letter gives you, the buyer, a good idea of what you can afford. You need to know this, otherwise you are wasting your time.
In my world of getting buyers lined up with a loan to purchase a house it is taken a step further. I call it a TBD (To Be Determined) approval and your information is given to the underwriting department at no cost to you. When your sales agent presents your offer with the TBD the seller will know you have been approved to purchase. An underwriting signature carries so much more weight.
This is called “going the extra mile.”
You are beyond compare
Even if you pay your bills on time and earn about the same as the friend who just got that $350,000 mortgage, don’t assume you qualify for the same loan.
A credit score difference of 620 to 740 will affect one’s ability to qualify because the rates will increase the cost of the loan. Government loans (FHA and VA) are less affected by this.
In wrapping this up you have been given the 3 reasons why you need to be pre-approved to purchase and I have shared with you how I take it a step further than many other mortgage lenders with a TBD.
Remember getting pre-approved or having a TBD gives you an open playing field of knowledge on what you can afford. It can tell you if you need to make some credit repairs, and it will give you the confidence to look at that wonderful home and present an offer.
This is what makes us the lender who is with you from start to finish, for more information call me at 813-361-6350 where we can start the process of putting you in the home of your dreams.