Should I REALLY Get Pre-Approved?
Shut. Your. Mouth.
A million times over, yes.
One of the most, if not THE MOST important step during the home buying process is to obtain financing. There are so many different types of mortgages available and each product varies from the amount of money needed down to the acceptable debt-to-income ratios and everything in between. When buying a home, it’s important for you to know for certain what the best mortgage product is that will suit your needs. Little or no money down? Do you want to avoid mortgage insurance? You want to possibly build? What other costs are involved? Whew.... and that is when we are getting into the meat of things. Let's back up and look at a couple of other scenarios that you may not even think about.
POTENTIAL CREDIT PROBLEMS
It’s not unusual for a potential buyer to not know what their credit score is, especially first time buyers. It’s also possible and common that a buyer is not aware of problems with their credit. The most common problem with a potential buyers credit is their score. Sometimes, it could be that they just do not have enough credit (or tradelines as you may hear it termed). There are minimum credit score requirements that each lender has for each one of their loan products. FHA credit scores can be as low as 580! (WHAT THE WHAT?) While some products require 680 and above.
Another common problem is for a Buyer to have an error on their report that they knew nothing about! The process to get errors removed from a credit report can include sending letters to the creditor and the credit bureaus. It can sometimes take a couple of months for it to get corrected on your report and for your score to be readjusted. At the end of the day, as long as you are able to stick it out and do exactly what the Lender tells you to do - you can normally get qualified. Patience is KEY!
I think this is what bothers us the most and why we highly discourage anyone from even scrolling through Zillow or Trulia to look at homes... UNTIL they can get qualified. It can truly eliminate disappointment.
Unfortunately, there are many real estate agents who will show properties to a buyer even though they (or the buyer) have no clue whether they can afford a home or not. This is a dis-service to a buyer more than anybody else. Why? A buyer can “fall in love” with a home, submit an offer, only to find out once they speak with a mortgage lender that they cannot qualify for the home due to credit problems or other reasons. This understandably can leave a buyer upset, heartbroken, and disappointed! This can all be avoided.... how? Right. By getting pre-approved!
There is so much more involved than what we have discussed above. Give us a call today! You will be hand-hold you through the entire process. That's our guarantee!