Real Estate Loan Pre Approval, Not What You May Think

Some people will lie to you. Most people will tell the truth, most of the time. It seems like it depends on how well what they say serves their own personal needs.

I’m telling you something here that will serve your needs extremely well if you’re thinking that you’re ready to buy a home. Get approved for a loan before you start looking at houses.

Even if you take all the steps necessary to get a pre approval, and I mean a real approval, not just pre qualification over the phone, but take all the steps, including filling out an application, submitting paperwork, etc., you still may not really be getting that loan on time.

We can take steps to help prevent this problem.

Call, Text, or Email me. I want to give you the support and help you need to be sure your home buying experience is as smooth and pain-free as possible. Now here’s a story you may find interesting about this process.

I worked with a guy earlier this year who even worked in the lending industry that had trouble. We met at my office, took the time to review a game-plan for finding the perfect house, he agreed to hire me, and we signed all the necessary paperwork.

The unfortunate part of the story is that he thought since he worked as a mortgage broker he was a ‘slam dunk’ for a new loan. Thought he knew the business well enough that he wouldn’t need to take the steps necessary to get a ‘real’ pre approval on himself.

Boy was he wrong. And I learned a valuable lesson. You see, I assumed the same thing he did. This guy’s in the industry, he should know if he can get himself a new loan.

So off we go looking at houses. I’ve got my handy little buyer’s agency agreement all signed, scanned and turned into my office file. It’s official! I set up a targeted search for him, we add to the pre-owned homes on the list some new construction developments and away we go.

Things are going great. We go inside about a half dozen houses, and also several model homes. It’s getting to look good. He really likes a new home  out in the Erie / Broomfield area up on a hill. We go back for a second, and then a third look.

Wow! Three visits, we’re hanging out a long time at the house on the hill. I’m thinking this is a good ‘ready to buy’ sign. Oh happiness. He’s found a new home. It’s one of the highlights of my work when I see that look of excitement on a client’s face, the gleam in their eye as they absorb the idea that this might be their new home… picturing themselves coming here each day to this great new place of their dreams… then it happens.

It’s not their fault, they thought everything was worked out, it can’t be true… but it is true. The lender just called them and said it looks like they won’t be able to fund the loan. It seems that there’s just one or two hurdles that can’t be cleared.

In the case of this client, he was so frustrated, and perhaps even embarrassed since he was a mortgage broker himself, that he just stopped returning calls, and skipped our meeting at the sales office. Fortunately this was before we were fully under contract, and he hadn’t risked any earnest money yet.

You know something? In many ways the system is set up this way almost as if the goal is to disappoint buyers and sellers. It’s so easy to get caught up in looking at houses, either online, open houses, or even driving around with a Realtor before you’re truly ready and clear on what you can afford.

There’s a way around this, and it’s usually easier than you might think. First of all, let’s be honest with each other. You want to find a lender, just like finding a Realtor, who will give you the straight scoop on what you need to do to make things go smoothly.

We have a saying in the real estate industry: “disclose, disclose, and disclose”. I think the same concept serves buyers well when talking to a lender (call it a loan officer, mortgage broker or what you will). Be up front about your finances and job situation, and don’t delay getting your lender all that they ask for. I’ve seen it happen way too many times where a buyer will cause their own delays and sometimes have jeopardized the possibility of completing the sale / purchase of their new home.

You don’t have to have these problems. Just because the system might seem like it’s against you, there are easy steps to avoid the problems most of the time. Take your time, find a mortgage broker or loan officer you trust.

A great way to do this is to establish a relationship with a Realtor a few months before you are actually going to move, get to know this real estate professional and get referrals from him. Build relationships of trust, have faith in these relationships, and follow the advice and guidance you get from these professionals. Do the homework before you are off on the wrong track with price, and before you get emotionally involved in a home that doesn’t fit your needs.

Whether it’s vacant land for sale, neighborhood profiles, or Boulder county business profiles, I strive every day to give you the useful information and critical support you need to make an informed decision.

Call, Text, or Email me. I’m never too busy for you or for your referrals… as a real estate professional intent on giving back to the community, my relationship-based approach is exactly what you’ve been looking for in a helpful Realtor, and I will listen to you.

Zachary Epps, full-time professional Realtor® and EcoBroker® at RE/MAX Alliance Boulder

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