As a Realtor®, I immerse myself in several website each day that allow buyers, sellers, agents and brokers to vent about their real estate adventures. Some of the stories are funny, others can bring you to tears and the rest are just examples of people just not working “on the same page”.
As one might expect, most of the disagreement and consternation surrounding a real estate transaction involve money. And with the economy where it is today, everyone's mantra is “Show me the money!”
My humble advice to those of you about to purchase a home is to “show everyone the money” up front. Most importantly, show yourself the money. I am talking about completing the loan pre-approval process. If all interested parties have a good understanding about your purchasing power and ability to close (including you!), you'll have a much easier time getting into the right home.
I go on to suggest that you get pre-approved as early as possible, maybe even before you start looking at homes or visit a real estate professional. By getting pre-approved you're not committed to anything and the results will provide you with the confidence that a certain mortgage is attainable and within reason.
Recently, I walked through the pre-approval process with an EWM Mortgage representative. Despite all the rumors, the process is not lengthy, nor all that invasive. You simply provide them with 2 years worth of tax returns, two years of employment history and a few months of bank statements. All data you provide is held in the strictest confidence and no one besides you will know the results, unless of course the results are good...in which case you'll have a letter written allowing you to "show everyone the money".
Step one of pre-approval is a simple credit check. The loan officer will ask for basic information from anyone who is going to be on the property deed. This includes, name, social security number, employer name, etc. No hard numbers yet. The step takes about 5 minutes while your data is typed into a computer program which instantly gets results back from each of the three credit bureaus.
If you have a decent credit rating, congratulations! You're on to step two...
Step two can vary depending on several factors, but will require some real numbers. The loan officer will request supporting documents going back two years (as stated above). Typically, you drop off this information and let the mortage lender review and crunch the numbers.
If all goes well, you'll hear back within a few hours as to what amount of money you can borrow and what rate is available to you. Of course, these numbers are flexible and dependent on the actual property you eventually want to apply the loan toward.
Now, with a pre-approval letter in hand, your showing agent, potential seller and listing agent will take you much more seriously. Instead of everyone walking on eggshells wondering if you can successfully make it to the closing table, you gain respect and an upper hand. Pre-approval opens doors, up to and including the one to your new home.
It should be noted that when working with me, I will always suggest you allow our in-house mortgage consultant provide you their services. There is no cost or obligation to you and even if you have another mortgage officer/broker in mind, it is always good to get several comparative quotes and opinions on your side.
EWM Mortgage (named HomeServices Lending) is a preferred affiliate of Wells Fargo Home Mortgage.