Sometimes SE Michigan home buyers come to me without a pre-approval letter. I ask them first if they have one and some home buyers feel they do not need one when they first start looking. They feel confident that they can get one. They have good credit and no debt. So they feel they can get one anytime.
In 2019 most lenders want to see all your documentation before they issue a pre-approval letter. It does not matter whether you are a CEO or a well know bank customer. They will not issue you a pre-approval letter based on what you tell them. The lender has to pull your credit and verify your income based on your pay stubs and w-2 or tax returns. Sometimes if a buyer has borderline credit or little credit they ask for asset statements too.
A lender puts their reputation on the line when they issue that pre-approval letter. If a loan doesn't close and a house deal falls apart becasue of lender issues, it becomes a big issue to everybody involved. It does not happen very often because lenders go deeper into the buyers financials now days.
#1 No seller's agent is going to accept an offer without a pre-approval letter. They just won't do it. So if you find a home and have no pre-approval letter you can't put an offer in.
#2 The number two reason to have a pre-approval letter before you start looking is because sometimes you just can't wait to get that pre-approval letter to put an offer in. I have had 5-10 buyers lose a home because they were not prepared. They didn't listen to me about getting a pre-approval letter. They put it off.
Then they found a house they liked. Then they went to get a pre-approval letter. They had to get everything to the lender and then wait for the letter. Some lenders take a couple of days to do it. During that time somebody else put in an offer and beat those buyers out for the house.
If only they had gotten the pre-approval letter before hand they would be living in the house they wanted. A couple of them were down right angry at the sellers for not waiting for them to get their letter. Unfortunately the seller is not going to wait when they have a good offer in hand.......on the possibility of you getting pre-approved. They do not know you. They do not know that you are a good credit risk and will get approved for their home.
All the seller cares about is the offer in hand and who is qualified to buy their home. In 2018 and 2019 with the low inventory you have to be prepared. There are other buyers out there that want the home too. So be prepared and have your pre-approval before you start looking for a home
For more tips about buying homes go to my website
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