Getting Pre-Approved…Why Bother?
There is nothing more embarrassing then getting to the check-out and discovering that you don’t have enough money to pay for your groceries. You have to hand the cashier back the items that you can’t afford, while the people standing in line behind you witness this whole embarrassing predicament.
We’ll go to great lengths to make sure this doesn’t happen when we buy groceries, yet we won’t take the same care when it comes to buying a home.
The problem is that many home buyers are confused by what it means to be pre-qualified for a mortgage versus pre-approved.
To get pre-qualified, people walk into their local bank and say that they’d like to buy a house. The banking representative asks a few questions about income and debts, provides a rough idea of what kind of property they can afford, and then sends them on their merry way.
Without knowing any better, people don’t realize that they’re often getting a rough idea of the kind of property they can afford instead of exact parameters. Besides having a skilled Realtor on your side, knowing the true maximum purchase price of the home you can afford is a key negotiating tool when making an offer on a property.
After all, how can you have the confidence to bid on a property you really like without a firm of idea of what the maximum amount is that you’ll get approved for?
As a dedicated Mortgage Broker, getting a proper pre-approval for my clients means giving people clear parameters on properties that they can afford, as well as pre-selecting lenders that will truly want their business.
Since I have access to 40+ lenders who all have their own policies, I can also pre-select the lender who will approve my clients for the maximum purchase price based on each person’s individual circumstances. Due to variances in lender policies, one lender may issue a pre-approval for a higher purchase price than another, so having access to a large pool of lenders truly allows me to get the best pre-approval for my clients.
Because I am not limited to using any one specific lender, my clients’ options are not limited either.
As a great perk, my pre-approvals usually include holding an interest rate that is good for 4 – 12 months. This protects my clients from the unwanted stress of worrying about interest rates going up, and allows them some time and space to find the right property without experiencing undue pressure.
As another terrific benefit, my service includes watching the market daily for opportunities to get you a lower interest rate even after the lender has already committed to hold a rate for you. This alone has saved my clients thousands of dollars.
How does this work?
Let’s say I have one of my lenders issue you a pre-approval and rate hold for a fixed rate of 3.69%, and it’s good for approximately 4 months. You are now pre-approved for a mortgage of $300,000 with 5 year term and a 30 year amortization.
Then, the market shifts and interest rates drop to 3.29%.
- At a rate of 3.69%, your mortgage payments were $1,375/month.
- At a rate of 3.29%, your mortgage payments would now be $1,309/month.
This difference in mortgage payments represents a savings to you of $66/month, $792/year, and $3,960 over the length of your 5-year term.
A similar scenario just happened with clients of mine who are a married couple.
First, I got them a pre-approval and rate hold for 4 months. Then, I watched the mortgage market and their file like a hawk. When rates dropped, I re-negotiated their rate hold with the lender and was able to drop their pre-approval rate down significantly. This saved them a significant amount of money, and gave them the peace-of-mind that they were being well looked after.
In turn, they were able to find a terrific property without the pressure of worrying about what interest rates were doing because they knew I had it covered. They were really pleased.
In order to get properly pre-approved, please click here for an overview of the process.
While getting properly pre-approved is invaluable to you, the process of getting this done with me is completely free-of-charge.
Once you’re pre-approval is complete, then you get to focus on finding the right home.
Please note that if you already own property and are considering re-doing your mortgage to save money or help you pay down debts, getting properly pre-approved is as important as it would be if you were buying a new home.
Therefore, I can still offer you the same benefits as I do to home buyers.
Please feel comfortable contacting me to get your *free* pre-approval started. I’ll happily answer any questions you have.
Ms. Anat Stapleton