What is Mortgage Pre Approval Really Worth? [mortgagecalculator-tips.blogspot.com]
Once you separate your "must haves" from the "kinda wants" in searching for your new home, your next three steps--selecting your real estate agent, solidifying your budget, and getting pre-approved for a mortgage--should happen fairly simultaneously. Getting My Move On: Finding a Secret Agent and Playing the Mortgage Game
Home loan professional Rob Spinosa of www.themortgagedictionary.com answers the most common question from homebuyers and those looking to refinance: "Where do I get started?" Often the answer is home loan pre-approval and this video covers how to get a mortgage. Rob goes over the items your lender will require, including; income, asset and credit documentation. Preapproval (sometimes called pre-qualification) helps real estate buyers know the maximum amount they can afford and if, based on paystubs, FICO scores and down payment they will be eligible for financing. Also in this video are checklists you can use to help you make an application for your mortgage approval. They itemize the things you should have ready when you speak with your mortgage broker or lender, such as; tax returns, bank statements, W-2 forms, etc. Rob goes over all of this in 3 minutes and helps you understand how to get a home loan and buy real es tate. For more information or to begin the pre-approval process, contact Rob Spinosa at rspinosa@rpm-mtg.com or by phone at 877-270-5959. Rob is a mortgage banker at RPM Mortgage in Mill Valley, California, just north of San Francisco. He is able to assist anyone in the state of CA, and can be found on social media platforms as below: www.facebook.com www.twitter.com www.linkedin.com
mortgagecalculator-tips.blogspot.com Mortgage Pre-Approval: How to Get Started
In 2004, at the height of the home buying boom, a survey came out from Campbell Communications indicating that fully 62% of the failed closings studied were due to home buyers being denied a mortgage - despite having "pre approval". The company found that 39% of pre approvals issued by Internet-based lenders were invalid. Mortgage brokers were also showing significant signs of unreliability, with 27% of pre approval letters proving invalid. National lenders had their letters fail 19% of the time, while local banks dropped the ball on 14%. Credit unions weren't far behind at 10% and the mortgage partners of real estate agents came in last with 9% found to be void.
A hot real estate market led many institutions to put through loans that should never have been allowed to get past the initial examination! However it is a cycle that can lead to some injudicious decisions - people want to buy homes, realtors don't want to show homes to unqualified people, people go to lenders for pre approval...
it is a nasty cycle that ends up with a lot of time wasted and sometimes a significant amount of money. It also set up unreasonable expectations on the part of the buyers - "I got pre approved and now I'm not approved at all?" which could very well have led many of them to less scrupulous lenders.ÂSome people think that the solution is a standardized letter of pre approval that is provided by a national organization such as the National Association of Realtors (NAR) or another recognized national association that can issue out pre approval letters based on a strict examination of the buyer's proof of income and assets.Â
Other people think it is incumbent on the lenders to tighten up their pre approval process so that unqualified buyers never get a letter that makes them and the real estate professionals they deal with think that they have a chance at a decent mortgage. It may be cruel, so the thought runs, but so is the time and expense taken to put through a home sale that doesn't happen. And it prevents financial disasters like today's recession.
Another key tip for buyers with early approval is to stop everything. Don't make a major purchase, don't change jobs, don't marry, don't start trying for a baby - just focus on getting the home purchase finalized. Major changes in one's financial outlook can be disastrous for the final approval of a loan.
Pre approval does not mean final approval. In fact, if it is from an unreliable source, it means less than the paper it's printed on. To make sure that a pre approval is genuine, buyers are urged to deal with reputable lenders and brokers, to take critical stock of their financial situation and to avoid making major changes to their lifestyle in the time between the approval and the closing. To not do so can mean significant amounts of time, effort and money wasted and possibly greater ramifications, like the straits that our economy is presently in.
Suggest What is Mortgage Pre Approval Really Worth? IssuesQuestion by kissy73179: How nessesary is it to get a mortgage pre-approval if it is not your first home buying? Our house is for sale and we want to start looking for a new one. I know 1st time buyers should get a mortgage pre-approval before looking at houses, But if this isn't our 1st house, how necessary is it for us to get one? Best answer for How nessesary is it to get a mortgage pre-approval if it is not your first home buying?:
Answer by Suzy
It's just as important. Getting pre-approved is a real time saver. It lets you know which homes you can afford and sellers know that you are serious when making an offer.
Answer by Luke 6:37
Unless you are paying with cash it's very necessary. Like mentioned above it saves a lot of time and could be the difference in you losing a home you really like to another buyer because they already took care of the money part.
Answer by Han_dang
always always always go for the pre approval, when you are pre approved they cant deny you no matter if you come back 6 mths later. and say im ready for the loan. prequalify only means youre ready "at this moment" or "while you are talking to the lender". pre qualify mean as with your current job, spending habits, and debt to income ratio you are able to afford the loan, but let say next week you get demoted and your your debt to rario gap narrows. you may not qualify this time. whe n youre pre approved the deals is bascally closed so no matter if youre demoted or not you'll still get it.
Answer by RM
These days there's more people trying to buy houses who can't than truly qualified borrowers. In order for the sellers of your future home to feel more secure negotiating with you, I'd get pre-approved. That may make them more lenient to go down more to get it sold since they know you won't have problems getting financing.
Answer by Potato Head
Seller's generally require you provide evidence that you can afford the home prior to or soon after entering into a contract. Evidence is a pre-approval letter for those using a mortgage and financial statements for those using cash. If you tried to buy my home and you could not provide upfront evidence that you could afford it, I would ignore your bid and go with someone else.
Answer by Landlord
You need it to make an offer, almost no one will even look at offers w/o it these days. It takes maybe 30 minutes, not a big deal.
Answer by 9 daughters
Pre-approval is always a good idea because anyone at any time could try to buy a home they can't afford and that just makes things embarrassing and disapointing. Knowing what you can afford just isn't a matter of your personal financial situation either. Lender's requriements change too. For example, a few years ago lenders were approving loans to almost anybody. Now, people with more income, more down payment, and better credit scores than those getting loans two years ago are finding themselves unable to get loans for homes that cost less.
Answer by massomia
It's essential. It's most likely the largest and most important purchase of your life. It's been several years since you have applied for a mortgage and lending has changed. Especially for those who are in business for themself or have stated incomes. It's a great opportunity to pre-screen your credit bureau report to make sure there are no surprises that have popped up over the last several years. In terms of negotiation. You will have no negotiation power with out pre approval. I would say pre-qual means nothing. It doesn't assure you a loan on closing day. There is an entire underwriting process for full loan approval. I've went into several lenders and had a pre-qual typed up without them even asking me for income, assets, or pulling a credit report. Do yourself a favor. Take all your documents in to the lender and have them pull a credit bureau. In the end, you'll be happier and you will be able to negotiate a better deal with this kind of leverage. Good luck.
Answer by Jon S
Yes. The approval letter is really not for you...it's actually to show your seller and assure them that you can buy the home or condo. Since you are selling your home you should require your potential buyers to show you a letter of approval. In fact, in today's times I would encourage you to actually call the mortgage person. Did they really pull credit and verify income or did they just give a letter without verification. Finally, since you're also buying a home you want to meet with a licensed professional and make sure you truly qualify for a home loan. There have been lots of changes recently and sometimes having a good credit score doesn't guarantee you a home loan (especially if you are self employed!) For more info, please visit http://www.mylendingplace.com
