4 Things You Should Know About Getting Pre-Approved for a Mortgage
Have you ever seen such a good deal on a property and were not prepared to buy it? I see this situation quite a bit. In fact, it happened to a few real estate agents and their buyers this week. I listed a condo across the street from the beach a couple of days ago and priced it very competitively. I ended up with multiple offers and the seller chose to work with the buyer who was pre-approved for his mortgage. Needless to say, there were several buyers who were disappointed because the owner refused to negotiate with the ones who were not prepared.
As a real estate agent, I hear my associates discuss situations where they have encouraged their clients to talk to a mortgage lender before they shop for a home. I am always surprised to find out how many would be buyers do not take this advice seriously-until it’s too late. This made me wonder why are buyers hesitant about talking to a mortgage lender? One of my friends told me maybe they just don’t know or understand the process. What we sometimes take for granted in this business is that people should just know that getting pre-approved is the first step in the home buying process. Sure, talking about credit, money, and finances can be intimating but it is a necessary evil if you need a mortgage. So, here are a few reasons why you should just bite the bullet and do it before starting your home purchase.
• Getting pre-approved for a loan early will allow you to shop around for the best rates and a good lender. Not every lender is created equal. Choosing a good lender that has the right loan product for you will make or break your experience. Not every mortgage company offers the same loans. For instance, financing a condo in Florida with less than 25% down is not an easy thing to do. However, there are a handful of lenders that do have that loan product. Going over finances helps you budget and know your financial obligations are.
• Your agent won’t work that hard for you until he or she knows you can pull the trigger. You know that saying “Show me the money”? Well, it does have some validity. If you have a busy agent that is working with several buyers and sellers at the same time (successful agents do), which client(s) get priority? It is the buyers and sellers who show their intentions by being prepared and pre-approved for a loan.
• Sellers take their home off the market upon acceptance of an offer. Once a buyer and seller agree on the price, etc. the home is taken off “active” status and new buyers can no longer view this property. This is a big risk for a seller. So, they really want to make sure the buyer has their finances in order and documents to the lender.
• Cleaning up your credit or identity theft. Unless you run your credit report often, you may not know that someone has stolen your identity until it is too late. You pay your bills on time, have only one or two credits cards and you think you are good to go. During the pre-approval process, a tri-merge credit report will be pulled (three credit reporting agencies) and there may be items on there that are old or don’t even belong to you. Outstanding issues could prohibit or delay you in getting a mortgage. One step in preparation could save you a lifetime of headaches.
Getting pre-approved for a mortgage may not be the fun thing to do but your future self will thank you for it. You will be ready to buy when you find the home you just cannot live without.
Sandy Williams is a licensed Broker Associate with EXP Realty and sells in the Sarasota area. With over 22 years of experience, Sandy and her team have sold over 2,100 homes. Nationally recognized. Sandy is originally from the Midwest but calls Lakewood Ranch her home.
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