Lenn Harley has epiphanies. When she does, she shares them with us and they're really good!!
I had one the other day (Saturday, to be exact) when I received a call from a first time buyer. While talking to the nice young man something weird happened.
I said, "You know, getting a car loan is the EXACT OPPOSITE of getting a home loan."
And I explained:
- A car buyer goes in to the lot. They test drive the vehicle, like it and then they apply for a loan. The mantra of "What can I do to get you in this car today?" is often heard.
When buying a car, the financing is done AFTER the decision is made to buy the car. And boy howdy, they'll find a loan for the car buyer. No credit, low credit, crappy credit . . . NO PROBLEM! They'll be able to finance a car loan.
NOT SO WITH HOME BUYING!
- A home buyer goes in to the house. They check it out, like it and then . . . if they make an offer based on the "car buying" mentality of applying for a loan AFTER they've found a home, they might not be able to close the deal.
Financing guidelines. Plain and simple.
- Buyers might be looking at property they are unable to qualify for
- The home buyers income-to-debt ratios are too close and they need to come up with more down payment in order to purchase . . . which they may not have
- The buyer CAN qualify, but opps, someone with a pre-approval submitted an offer and the seller opted to go with the buyer who was pre-approved
- The seller doesn't want to accept an offer which isn't backed up with the Buyer's pre-approval
- and the other reasons buyers can get turned down for a home loan are vast and varied
It was an epiphany . . . or something like that.
If you're buying a home GET YOUR FINANCING IN PLACE BEFORE YOU GO OUT AND KICK THE TIRES!
The seller is NOT OFFERING FINANCING. They won't be able to get you in the home today . . . unless you show them your pre-approval with your offer!