What can a pre-approval letter do?
After several months of looking for a home, Mr. & Mrs. Smith have found their dream home. The home has 3 bedrooms, 2 baths, and lots of room for the kids and the family dog to run around. So, they have an agent write an offer on the home. At the same time, another family is interested in the home. Now there will be two offers for the seller to consider. To keep it simple, your offer nets the seller more money, but you are not a pre-approved buyer. The other offer is for less money, but the buyers are fully qualified to make the purchase with a bank's pre-approval.
Can you guess who got the home?
You may be shocked to hear that the offer for less money won over the seller. Sellers want the re-assurance that a buyer is serious, qualified for the purchase, and can work within the time constraints the offer promises.
Moral of the story: If you are serious about becoming a homeowner, it is time for you to find a lender who works with your best interests in mind. Have the advantage over the other buyers: get pre-approved. There should be no fee for this service.
Not all mortgage lenders are the same; consult your REALTOR® or local professionals to help point you in the right direction. This tip can save you thousands of dollars over the life of your loan. You should not underestimate its value.
BONUS: Talk with your REALTOR® or lender to find out if it is a good time for you to refinance your current home, or for the most current lending trends.
Carl Schwagmeyer