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Why is it Important to be Pre-Approved
Coming into 2014, I want to answer a question we get asked quite often and that is “What is the importance of being pre-approved and what do I need to do to get pre-approved?” This is especially important to answer that in 2014 because lender guidelines are changing; they’re going to want more information than they did in the past. Generally speaking, they will want your last two tax returns and your last two bank statements. This is due to the financial reform for the lending industry in order to prevent people from ending up in bad mortgages or situations that become unworkable for them. Now, lenders could be held liable in for people that end up in default.
All that aside, it has always been important for people who are serious about buying a home to become pre-approved. The mortgage lender we use can typically get you pre-approved in just a few hours but it’s always good to have this taken care of up front because you may have items on your credit report that may be derogatory and in some cases, they’re not even correct. Doing this beforehand can allow the lender to correct those mistakes and improve your score.
Another factor is that most buyers want to have a clear picture of what their monthly payment is going to be for a given purchase price. The only way to get an accurate number for that is by looking at your current income and current expenses. With that information, we calculate exactly what your payment will be at today’s interest rate. Based on that information, you will be able to decide whether you spend a little more money for the right home or maybe even scale back your purchase.
Once you have this information at hand, you’re ready to make an offer on the home you like. In our fast moving and competitive market, you don’t want to be in the position of finding your perfect home and then having to get pre-approved. This may only take a few hours, but the difference of a few hours to a day could mean missing out on the home due to lack of preparation while others were making offers in front of you.
Last but not least, with the mortgage lender we use, we are able to get people from start to finish in the borrowing process and complete the purchase in half the time than other lenders in our market. This makes us look more attractive to sellers because of the speed, amount of control and simplicity of our offer. We have even gotten offers accepted that were less than the highest bidder due to this fact. This doesn’t cost you money or obligate you and it will give you several advantages to get to the home you want at the price you can afford.
Thanks and have a great day!
