Wednesday, August 21, 2013

Home Buyer Tips: Step one....get the letter.

One of the first steps in the home buying process is obtaining "the letter."

What is "the letter?"  The mortgage pre-approval letter. 

Why is this step so important it must be done first?  Because it controls most decisions made in the home buying process unless a buyer is paying cash. 

What is the difference between a mortgage pre-approval and a mortgage pre-qualification?   
  • Mortgage pre-qualification ("pre-qualified") means very little when you are considering buying a new house or condo.  It is based on just the information an individual provides and can be done in a few minutes.  It has not been verified and is really an amount a buyer "might be qualified for if all things check out."
  • Mortgage pre-approval, on the other hand, is based on a review and verification of information submitted such as employment history, income, submitted W-2s and credit history.    
The reality is a mortgage pre-qualification letter means very little to a seller in the current Brevard County real estate market.
In a market where it is more common for sellers to receive multiple offers its imperative serious buyers be pre-approved  before they make their offer.