Are you considering a home purchase this summer? In today’s Lake Havasu real estate market, it is more important than ever to get pre-approved for a mortgage loan right away. The days of a pre-qualification letter being enough are gone. In fact, talking to your lender and starting the pre-approval process should be the first thing on your list…even before you start looking at properties.
Home Buyers Need to Make Pre-Approval Their #1 Priority
The Pre-Approval Process
First, let me explain what happens with pre-qualification. A buyer sits down with a lender. The lender asks about their income and employment status. Then, they pull credit scores to make sure they meet at least the minimum standard for a loan. Based on this preliminary information, the lender issues a pre-qualification letter. This only takes a few minutes to complete.
Now, the pre-approval process takes much longer. You (the buyer) fill out a loan application. Then, the lender asks you to provide documentation of income (bank statements, W-2s, paycheck stubs, etc.). During the loan process, they verify your employment, pull a comprehensive credit report, and review the information you provide them. After their review, they reveal 1) whether or not you are approved and 2) the maximum amount that you qualify for. Now, keep in mind that this does not equal final approval. They still require an appraisal of the property in question. (No bank approves a loan for more than the appraised value.) And any changes to your debt load (big purchases like furniture, cars, flooring, etc.) can turn an “approved” into a “denied” in an instant. But, at least you know the max amount of money you qualify for so there are no surprises when you find the Havasu home you want.
Why Make This Priority #1?
Buyer demand remains high in the current real estate market. And those buyers are fighting over the limited inventory currently on hand. Multiple buyers for a single property used to be a rarity. In today’s market, it tends to be the norm. Including a pre-approval letter with your offer helps boost you to the top of the list for a seller. Some sellers will not even accept an offer unless it comes with proof of financial backing. Since it takes a little time to get through the loan process, you absolutely must talk to your lender as soon as you decide that you want to purchase a property. Otherwise, you may find yourself losing out on home after home. When you are ready to start your home search, call me at (928) 208-5154 or send me an email.
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