Pre-approved Beats Pre-qualified Every Time!

Pre-approved Beats Pre-qualified Every Time!

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If you are looking to buy a home there are three different ways that you can show the seller you are ready to buy. Unfortunately, two of those are wrong.

Home MortgageWrong, in the sense that they don’t give the seller confidence that you will actually close on the deal, the sort of assurance sellers need in this shaky economy.

Let’s take a look at three ways you can convey interest in a home, with only one method offering iron-clad assurance you will follow through:

Pre-qualification from a realtor — typically done verbally and without confirming your income, debt, and other personal financial information, this step means nothing to the seller. When a realtor pre-qualifies you, all they are ensuring is that the time they spend with you looking at houses to buy is time worth spending. For all they know, you could be making this information up!

Pre-qualification from a mortgage lender — your mortgage lender may be interested in loaning you the money to buy a home and is even willing to state in writing that you qualify for a loan. Trouble is, you haven’t been approved yet — anything can happen — you could lose your job, interest rates may jump up, etc. Not a bad step to take, but it won’t seal the deal.

Pre-approval from a mortgage lender — ah, now you’re talking! You not only got qualified for the loan, but you have been approved for the loan at “x” percent rate for “y” number of years. Get that information in writing and hand it to the seller and they’ll know that you’re in a position to buy their home.

The sub-prime mortgage meltdown has made everyone skittish, so why not assure the homeowner and give yourself the peace of mind by getting pre-approved for a mortgage before you present your offer? Ask your mortgage lender to provide proof of mortgage approval and carry that letter with you when presenting your offer.

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