Most home buyers know they should get a mortgage pre-approval letter from a lender before they begin seriously shopping for a home. But the reasons for this advice aren’t always clear, and buyers sometimes are dismayed by the amount of paperwork involved. Here is some of the reasoning behind the advice:
Getting a pre-qualification letter from The Chris Bonin Loan Team is the perfect place to start your home search. A pre-qualification letter from the Chris Bonin Loan Team involves verification of your basic financial information. Our team will ask for documentation to confirm your employment, the source of your down payment and other aspects of your financial circumstances. A pre-approval is slightly more time-consuming than a pre-qualification, however we take the extra time to ensure that your loan goes very smoothly. The additional due diligence is exactly why the pre-qualification carries more weight and allows you to have a much quicker closing with minimal surprises that you may experience with other banks.
Most home buyers have a rough idea of how much they would feel comfortable paying every month on their mortgage. However, there’s no quick-and-dirty way to translate that monthly payment into a specific maximum mortgage amount because of other factors — down payment percentage, mortgage insurance, property taxes, adjustable interest rates and so on — are part of the calculation. And, you might not be qualified to borrow as much as you think you should be able to borrow, depending on your income, your debts, and your credit history. With a pre-approval from The Chris Bonin Loan Team, you will know right where you stand.
Sellers often prefer to negotiate with pre-approved buyers because the sellers know such buyers are financially qualified to obtain the financing they need to close the transaction. A pre-qualification letter is an especially favorable point in a close multiple offer situation. And, you will feel more confident about making an offer with a pre-qualification letter in hand and the knowledge that you’ll be able to obtain a mortgage.
A pre-qualification letter signals to your real estate agent that you’re a well-qualified buyer who is serious about purchasing a home. The increased likelihood of a closed sale — and a commission — will naturally motivate your agent to devote more time and energy to you. In fact, some agents won’t even show property to buyers who don’t have a pre-qualification letter. Call or email us today to get started!
Pre-qualification letters aren’t forever, they can be subject to an appraisal of the home you want to purchase and are time-sensitive. If your financial situation changes (e.g., you lose your job, lease a car or run up credit-card bills), interest rates rise or a specified expiration date passes, we will review your situation and recalculate your maximum mortgage amount accordingly. We will be with you every step of the way.