Get Your Pre-approval Letter First!
You have been looking at homes for months, now you have found the perfect home. It is time to put in an offer on the home you like, your agent tells you that you need to submit a mortgage pre-approval letter with your offer for it to be considered. You put the kids to bed and you sit at the computer and you get a pre-qualification letter that you print off the compute, or dig out an old pre-qual letter. Yes, it may satisfy the home seller, but you are under serving yourself.
Avoid a pre-qualification letter. A pre-qualification is where you just state your income, assets and they may pull one credit score. Nothing has been verified by the mortgage originator.
Having your information verified by the mortgage originator will save you tons of aggravation. He will know what questions to ask to work through any potential issues.
If you are considering buying a home, the first thing I recommend you do is sit down with a mortgage originator and go over the financing before you ever start your home search. You will want your mortgage originator to pull your credit, verify your income, assets and employment. Before you start the process, you will be able to talk about real numbers, real interest rates and have a full understanding of the mortgage process.
Home Sellers Want A Pre-Approval Letter That Inspires Confidence
The biggest reason real estate deals fall apart is the borrower has been denied a mortgage. A seller does not want to tie up his property with a buyer that can’t deliver on their mortgage financing.
When I look at a pre-approval letter for a home seller, I want to see that income, assets, credit and employment have been verified. In a competing offer situation I want the permission to speak to the mortgage officer to find out how far they have gone with the file. I was a mortgage originator for many years and I know the questions to ask.
What is the Power of a Pre-Approval Letter
Prevent you from looking at the wrong priced homes
It happens all the time, a buyer tries to figure out what they can afford on their own and spend months looking at the wrong homes, that they cannot afford. Mortgage financing is tighter than ever, many times overtime or second jobs cannot be counted on as income that you were figuring to finance your new home. Another huge mistake buyers make, especially if they are looking at low money down deals, is they look at teaser rates that are unobtainable and you may end up paying one percentage point more.
Give you confidence
If you work with a good real estate agent and mortgage originator, you will know with in a few dollars what each home will cost you per month. You can move forward with confidence that you can afford the mortgage and be dealing with real numbers.
Help avoid disappointment
There is nothing worse than falling in love with house and get an offer accepted only to find out months later you were denied the mortgage. Or, worse yet, get approved for the mortgage only to realize it is a few hundred dollars more than you were expecting and now it is too late to pull out of the deal or you risk losing your deposit money. Seems silly…. but it happens.
Give you increased negotiating power
A good pre-approval letter gives you increased bargaining power. Many times my home sellers will take a lower offer over a higher offer if they feel the pre-approval of the lower offer is a stronger one.
Save you money
By pulling your credit early, a mortgage originator can identify problems on your credit report. Many issues are minor can be fixed or even some small changes can boost your credit score into better credit tier. Mistakes happen all the time on credit scores. Why should you pay a higher interest rate because there is a reporting mistake?
Visit your mortgage originator early and a good pre-approval letter should save you time, money and effort.
Other helpful Mortgage Resources:
- Lynn Pineda- Why Do I Need A Mortgage Pre-Approval?
- Paul Sian- How To Boost Your Credit Score Before Applying for a Home Loan
- Bank Rate- How a Mortgage Pre-approval Helps a Home Buyer
- Kevin Vitali- Should I Get an Adjustable Rate Mortgage?
If you would like help finding a mortgage originator call me, Kevin Vitali at 978-360-0422. I will send you three names of mortgage originators. I have used them with with many prior clients, all who have been very satisfied.