Those pesky Port St. Lucie Realtors® are always asking Buyers for their Pre-Approvals up front, but why?
You know you’ve got a job and good credit, why do you have to jump through hoops to talk to a lender?
One of the main reasons I give my customers is that if you go to tour a house today and you fall head-over-heels in love with it, you won’t be able to make an offer without having a mortgage pre-approval. Nine out of ten sellers are going to want to see that you are already qualified.
Mortgage rules change constantly. I used to be a mortgage lender back in 2008 and what the rules were then have changed so much to what they are now. But the basics are still the same. A mortgage lender is going to check for the following:
Typically you can get pre-approved right over the phone and without any paperwork. But be sure you’re honest about your situation. A good lender is going to dig deep and ask questions to make sure they understand you’re full story. Why? Here’s a story that will explain why a real estate agent will want to know you’re qualified up front:
I was working with a customer named Bill in early 2011. He and his wife were already pre-approved! It didn’t take long to find them the perfect house – a well-kept 3 bedroom home in the Torino area. It even had stainless appliances and granite counters for just $125,000! The only caveat was that it was a short sale. We made an offer, the seller accepted, and now it was just a waiting game.
A few months went by and we found out that the seller’s lender was going to accept our offer and give us 3% back towards the closing costs! Bill did his inspection within the 10 day time-frame and started working with his mortgage lender to get her the necessary documents needed.
After Bill’s mortgage lender reviewed his paystubs she realized we had a problem. Bill’s income didn’t match what he had told her in his pre-approval interview. It wasn’t really his fault because there was a miscommunication in giving the details on how his income was calculated and reported on his taxes.
Unfortunately this miscalculation caused Bill to no longer qualify for the loan.
Bill had already told his landlord that he was moving, he paid over $300 for an inspection, and was already starting to pack up for the move.
Moral of the story? Be up-front with the mortgage lender and make sure they understand your income structure and where your down payment is coming from. Yes, it’s a hassle to do this beforehand but it will save you time and heartache in the long run.
Even if you don’t qualify for a mortgage now, a good lender will coach you on some strategies to get you on track to being able to afford and own your own home.
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Ready to rock and roll? Click here to start a conversation about what you’re looking for or call Sarah directly at 772-485-3214.