Mortgage Prequalification – More Than A Good Idea

Posted by Greg Steinaker on Wednesday, May 28th, 2014 at 7:33am.

If you are in the process of selling your home and you know you are going to buy another one, or are currently renting and are presently looking for a home to purchase or a about to start, of you are not yet preapproved for your home loan: stop what you are doing and take the necessary steps to resolve this necessary hurdle. Why do I use the word hurdle? Because over 30% of escrows disintegrate because of financing, and this occurs for one simple reason: lack of planning and preparation on the part of the buyer.

One of the biggest problems that the buyer runs into is over estimating the capabilities of the lender and also their own strength in borrowing. Every lender boasts of great rates and will certainly tell you “sure we’ll get your deal done”, but when you get them all of the documentation you learn that nothing really is approved after all. Over estimating the borrower’s strength means that whenever I ask a person if they have been preapproved for their loan yet the response I get 90% of the time is “not yet, but we are not worried about it we have perfect credit.” I have been in mortgage banking for over 20 year and have sent out too many decline letters to know that “everything isn’t just fine” until the deal is closed.

At BanCorp Real Estate Group we take the mortgage preapproval process so seriously that we won’t show properties to a prospective buyer unless they are preapproved for a mortgage or are in the process of securing a preapproval (they have taken the initiative in this important process). Time is money. What good is it for anybody to be out showing properties to a family that does not qualify for a mortgage in the 1st place? It takes maybe 15 minutes to gather the required documentation that the lender needs to pre-approve you with. If you are working with a good lender, they should be able to give you a decision on your approval within48 hours.

Take the guess work out of the purchase of your next home and get preapproved up-front. It will take away a lot of anxiety and will also give you more leverage when making the offer.  

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