Having a mortgage pre-approval ready to submit with a prospective buyer’s purchase offer is good for everyone in the transaction. It saves time and removes the uncertainty of knowing whether the buyer will be qualified after negotiating a contract. The direct benefits include:
- Looking at the “right” homes – In the right price range and condition to qualify for the kind of mortgage that will be used
- Find the best loan – rate, term, type
- Uncover credit issues early – time to cure possible problems
- Negotiating power – price, terms, & timing
- Close quicker – verifications have been made
- Avoid loan pre-approval as the basis for a counter-offer – Listing agents and Sellers usually expect to see a mortgage pre-approval submitted along with an offer, so a missing pre-approval is likely to result in a counter-offer being received even if it’s the only flaw of the original offer.
- In a multiple offer scenario it may be to your competitive advantage and the lack of it could disqualify your offer from consideration.
There is a significant difference in having a trusted mortgage professional take a loan application and run all the necessary verifications compared to going through calculators on a lender’s website. Beside the peace of mind, the cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.
Even if a person has been pre-approved, a second opinion from a different lender may be a good option. It can verify that a loan program is competitive or you may discover that you can improve on it. Either way, it’s time wisely spent. Contact me if you’d like a recommendation of a trusted mortgage officer.