Want an Advantage When It's Time to Buy?
Be Ready With Your Mortgage Pre-Approval
A scenario I'm all too familiar with played out once again over this last weekend ...
A phone call came in from a prospective home buyer. They wanted to get pre-approved for a mortgage. Their realtor had advised them that they needed a Pre-Approval Letter in order to submit an offer on a home they had viewed and fallen in love with.
Time was of the essence, as they hoped to submit their offer to the home's Seller immediately. Interest in the home was high and they were sure there would be multiple offers made.
This was my first contact and conversation with this home buyer. But from very first contact, we were in "crisis mode".
We shot from zero to 60 mph instantly. And right out of the gate, these home buyers were feeling stressed regarding their mortgage financing.
It didn't need to be that way ...
Now I completely understand that potential buyers might start a home search and view properties casually when they first being the home buying process. It's their way of testing the real estate waters, so to speak.
And I also understand that while casually viewing homes, a portion of those prospective buyers come upon the "perfect home" that triggers their need for more serious financing answers and actions.
But in the majority of cases, that is not and should not be the case ...
As a result, the process of seeking and securing mortgage financing should be more measured and methodical. It should be prepared for, planned for, and executed in stages. When conducted in this manner, the mortgage process is far less stressful and borrowers avoid much of the stress and panic that my new clients felt so keenly over the weekend.
This more measured and methodical approach is a distinct advantage to lenders too as it allows them ample time and opportunity to ask their prospective borrowers more questions and gain more detailed information ... an advantage that should not or cannot be overlooked or minimized. When given time, a lender can perform a more thorough examination of financial information, credit reports, subject property (and more). And that, in turn, means more dependable information provided by the loan officer to their clients and agents ... and fewer issues arising moving forward.
It's a fallacy that, in the current mortgage process, Pre-Approvals and Pre-Qualifications are a simple thing to provide. If performed properly and reliably, they are not. To be considered correct and reliable, much info must be gathered and considered. Information, preparation, and execution all matter greatly during this time ... as does your choice of Loan Officer.
A recent article posted by Sally and David Hanson, Broker Associates with EXP Realty, serving southeastern Wisconsin ... and veteran members of ActiveRain ... highlighted the importance of thinking and acting proactively during the home buying/financing process. They wrote this plea to professionals, "Agents ... BOTH ... listing and selling ... be Pro-Active ... keep an ever watchful eye on all the moving parts of the transaction. The transaction you "save" may be your own!"
I would add that loan officers, in tandem with their borrowing clients, should think and act in much the same manner ...
Potential home buyers (and those refinancing), should allow ample time to loan officers to gain all the detailed information needed for a Pre-Approval Letter. The time that allows a loan officer ample opportunity to conduct an in-depth analyzation and opportunity to seek further info from their client, if needed. The results are far better for all involved.
As an example ...
A first-time home buyer was referred to me by his father, an acquaintance of mine. This young buyer reached out to me initially via email. He then followed that exchange of information up with a phone call.
This young buyer related to me that he'd previously communicated online with 2 other lenders and had even sought Pre-Approvals from them. Neither lender had provided him the information he gained during our phone conversation.
That important information included:
- Detailed information about financing a Condo
- Substantial info regarding the Transfer Tax Fee he would incur because of his Condo city/location preference
- A breakdown of his prospective Closing Costs
- How his Interest Rate would be affected by his Credit Scores, Down Payment percentage, and Debt-to-Income Ratio
- The cost of his (required) Private Mortgage Insurance
- That a Seller could be asked to contribute/offset some or all of his Closing Costs
- That his search for a condo (and subsequent information regarding the property) could be better served by a Realtor
- A referral to a local experienced Realtor
- More ...
The present real estate housing market does not allow for hesitation or poor preparation. Time, money, and a home you love can be lost if you wait too long to take action.
Commit yourself and the time needed to a proper mortgage search ... starting with a thorough search for an experienced knowledgeable loan officer. Start that search early. Talk to that loan officer months ahead of when you hope to buy ... or even start a preliminary search for a home. The more time you allow, the better.
If buying or refinancing a home or investment property in the Chicagoland - IL - WI area, I'd love to hear from you.
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