The First Step to Smart Planning—Pre-Approval


The importance of a Pre-Approval….

If you are looking to buy a home within the next few months, then I highly recommend that you get Pre-Approved.  Many buyers apply for a loan and receive approval from a lender BEFORE searching for a home.

Why is pre-approval important at the beginning of the home-buying process?

Some buyers think that when purchasing a property it should go within this two-step order:

  1. Find the right house
  2. Negotiate the transaction while figuring out their financing to make the purchase

It makes sense to know your deal, before you make your deal.

FIRST STEP:  Get Pre-Approved

  1. The worst time for a buyer compete the loan process is after deciding on the property that they want to purchase.  During this time, buyers are overwhelmed and may make haste to their complete their financing rather than making the best possible decisions for themselves.  The buyer may put themselves in a position whereas there is no time to compare and shop around for their best possible interest rates, lender fees, and options for their mortgage financing.

            ~No surprises 
            ~Stronger buyer position for offer submissions
            ~No rushing later for lender needed docs when in contract
            ~Smart preparation!

What is the difference between a Pre-Qualification and a Pre-Approval?

Pre-qualified buyers are those whose lenders have determined how much they can borrow based on information the buyer has only verbally provided to the lender and their credit report. Nothing has been verified to determine the buyer’s true ability to obtain the loan. The pre-qualification is a brief quick look at the borrower’s finances without any supporting documents from the borrower. 

A Pre-Approval is a legitimate, bona fide, fully documented, comprehensive, no buyer surprises result; whereas the lender has already given the borrower the loan.  The loan is only contingent on the property appraising for the sales price.

1.     Pre-approval will determine your price range and narrow your search parameters.  Based on your down payment and that pre-approved mortgage amount, you will know how much you can afford before you even start looking for a house.

2.     Pre-approval can cut days or even weeks off the closing, because the lender has already conducted its credit analysis and approved you for a mortgage.  Buyer is awarded with closing on time with no per diem late pay charges.

3.     Pre-approval strengthens your offer and negotiating position.  Stronger buyer position for current bidding wars for discounted REOs:  A seller will often choose to accept an offer from a buyer who is pre-approved for a mortgage over one whose financial picture is still in question. 

4.     Pre-approval can better compete with all cash buyers.

BUYER TIP:  Buyer to request and lender to provide as soon as possible:

~GFE-Good Faith Estimate Statement

~TIL-Truth in Lending Statement

For the buyer to be poised the BEST, buyer to obtain an Upfront Fully Documented Underwritten Approval from a direct lender/Nationally recognized bank.

I work closely with some reliable and reputable lenders that I will be happy to refer to you. 
Please feel free to contact me at anytime…..thanks and have a great day!

Julia St. Marie, RRG, ABR, RSPS  at Realty ONE Group     702-355-HO-M-E (4663)


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