ATTENTION BUYERS .. Don't waste your time getting "Pre-Qualified"
I am sure there is an argument out there as to why you SHOULD get pre-qualified, but here is my thought... and pay attention buyers...
Do you want to get the best house you can for the least amount of money? Of course you do. In order to make this happen, you have to put yourself in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. When a seller is looking over multiple offers, there can be other terms that will help place you into the right position to get the offer accepted. One such term is the strength of the buyer or the length of the escrow. These are critical to a seller.
In the past we have always recommended buyers get "pre-qualified" by a lender. This means you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lenders pronounces you "pre-qualified" and issues you a certificate that you can show to a seller. Well, sellers (and certainly Listing Agents) are aware that such certificates are WORTHLESS and here's why! None of the information is verified!
Often what happens is that unknown problems surface! Problems that I have personally seen are recorded judgments, child support payments due, glitches on the credit report due to a large variety of reasons (both accurate and inaccurate) and even down payments that have not been in the clients' bank account long enough. These are just a few examples of what could go wrong to turn your 'pre-qualified' letter into just another recyclable paper.
The way you make a strong offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few minutes to a few days, depending on your situation and the availability of your supporting documentation (bank statements, paystubs, tax returns, etc.)
This process is VERY POWERFUL and a weapon we recommend all of our clients have in their negotiating arsenal.
So.. do you HAVE to get a "Pre-Approval" letter or even a "Pre-Qualification" letter before shopping for a home? Of course not... but don't you want to know how much money I can lend you? I would never recommend shopping for anything and making an offer on an item without knowing how much money you have in the bank. Shopping for a home without knowing what you can afford is like writing a check and hoping that is clears the bank. Take the time to contact a mortgage professional who will consider all factors such as Insurance, Taxes, HOA dues, MIP/PMI, in addition to your other monthly obligations (credit cards, auto payments, cable bills, etc.).
Are you "Pre-Approved" or just "Pre-Qualified"?
I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice. If you are available to talk, I am available to listen. Give me a call or visit my website for more details.
Do you want to know all of your mortgage options? Call me today and let's discuss them further.
Always available for your Texas Mortgage and Home Loan needs!
John R Cannata P#214.728.0449
NMLS # 322646
The views expressed on this site are mine alone and do not reflect the views of my employer.