A mortgage pre-qualification is an informal estimate of your home buying power, based on unverified information you give to the lender. Lenders sometimes market “instant pre-qualification” to buyers, in the hopes of attracting new business. At best, a pre-qualification can give you a frame of reference for your potential home buying power. There is no commitment by the lender to actually loan you money in any amount.

A mortgage pre-approval takes you through a full application and underwriting process. In this situation, all of your employment, financial and credit information will be verified. You’ll need to provide copies of your last 2 years of income tax returns, plus 2 months of bank statements, a month’s worth of pay stubs, and authorize a review of your credit report.

Due to automated underwriting, the pre-approval process doesn’t take is long as it once did. Depending on the lender and the type of mortgage you seek, you might have an answer in a matter of weeks, days, hours – or even minutes. The reply you receive will be one of the following:

• Approved
• Approved with conditions
• Suspended (more info/documentation/verification required)
• Denied (reasons for denial will be provided by lender)

While no one wants to receive a mortgage “pre-denial,” it’s far better to discover an issue with financing before you make an offer on a home! It gives you the opportunity resolve issues – and reapply – before you have a home on the line.

If you’ve done your homework, such as reading our free e-book, “How to Buy a Home like a Pro,” you will likely have performed some financial preparation prior to your mortgage application. Things like a steady employment history, consistent income, good credit, good savings habits, and modest debt levels will help your chances of approval.

Once you have a mortgage pre-approval in hand, you can browse homes for sale in the appropriate price range. You can submit a confident offer when you find the right property.

Home buyers who write offers with a mortgage approval contingency, without showing any reasonable proof of financing ability, are not taken too seriously by home sellers.

When you are ready to begin your mortgage pre-approval, we can help! We will refer you to local, highly reputable mortgage lenders in Central Ohio, who will explain your financing options. When you become our Buyer-Client, we can also help you evaluate the mortgage offers you receive!

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

The post Mortgage Pre-Approval Remains Essential for Columbus Home Buyers appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.

What happened is this: there was an input error on the loan application, concerning the start date of employment. Somehow, this went undetected in prior verifications until the last minute. The Buyer-Clients did not have a copy of the loan application, and had no idea there was any kind of problem until the lender abruptly denied the loan. (The length of employment didn’t meet the underwriting criteria for Freddie Mac or Fannie Mae.)

This is why we make sure our Buyer-Clients are protected by a financing contingency in the purchase contract! Despite your best efforts, things beyond your control can happen. Having a mortgage denied is always unpleasant, but the stress of being denied two days before closing is incredible. The last thing you’d want, is to be on the hook for a home purchase that you could no longer finance! A financing contingency should never be waived, no matter how “hot” the market is.

Fortunately, in this case, we were able to find another lender who was willing to step in, and accept the length of employment as sufficient. The closing date had to be pushed back by about 12 days, but our Buyer-Clients are now happy homeowners.

The moral of the story: a mortgage pre-approval is a reasonable assurance of financing, but it isn’t an iron-clad commitment by the lender. The mortgage underwriting process is refreshed shortly before closing, re-checking employment, income, debt levels, credit scores and banking information.

It’s important not to “rock the boat” before closing. Once you have a pre-approval in hand, do not make big purchases, make big cash deposits or withdrawals, or change jobs.

Even then, snags can happen. Ask your lender for a copy of the mortgage application and double-check the information. Stay in touch with your lender throughout the home buying process, and respond promptly if your loan officer contacts you with questions.

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA-M, CNE, CSP, PSA, e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

The post Mortgage Pre-Approval Can Fall Flat on Home Buyers appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.