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Pre-Approval Power
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| If you are serious about buying a home, the first step in the process should be to get pre-approved for a mortgage. The process involves submitting the proper financial documentation (i.e. tax returns, pay stubs, W2’s and bank statements, etc.) to your Mortgage Advisor who, in turn, reviews it and issues a pre-approval. The pre-approval qualifies the borrower for a maximum loan amount based on their financials and credit worthiness. A pre-approval can provide major negotiating power when writing an offer on residential real estate.
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The pre-approval provides tremendous benefits, to summarize:
- Provides the borrower/buyer with an idea of how much house they can afford
- Eliminates uncertainty and reduces financing issues in the 11th hour
- Increases negotiating power by providing the ability to perform a quick close because the financing is already in order
- Increases negotiating power by providing the ability to write offers exclusive of financing contingencies, thus giving the buyer the same appeal as a cash buyer
- Increases the likelihood that a good agent will tour you for properties since most successful agents will not waste time with non-approved buyers
- Pre-approval can be done at basically no cost (cost of a credit report $22)
- Can be accomplished in as little as 48 hours
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As you can see, it is worth the time investment to get your financials together and get them to your Mortgage Advisor so you can get a pre-approval in hand. Pre-approvals are typically good for 90 days from the date they are issued. If they become outdated, usually only a few minor documents need to be updated to bring the pre-approval current. |
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