5-4-3-2-1 Countdown to Making an Offer

What are the steps you can’t skip before buying the home of your dreams? How about before even making an offer on a home you love? You MUST MUST MUST get a real pre-approval letter from your mortgage broker. No ifs, ands, or buts about it. I won’t write an offer for you, and neither will any other experienced and qualified Realtor.

If you have never applied for a mortgage, or its been more than 10 years, then you might be a little shocked (and even miffed) by the amount of documentation and financial detail you will go into. I get it. Its very important that you don’t settle for a lender who doesn’t ask for this much info. The nightmare scenario that I’ve seen once and heard about a lot is this: You have a lender, they get some financial info from you, maybe a pay stub and some tax returns. They say you are good to go, and pre-qualified to buy a house up to $X. We look and look, write lots of offers, finally get the right house. You spend $700 on home inspections. You give notice on moving out of your apartment, pack up your storage unit, tell all your friends, family, and colleagues. We post pictures and videos of your new home, and we plan your House Warming party!

Leading up to closing your lender is asking for more and more financial documents. You gather them and get them all in. The week before closing, 8 days before you plan on moving into your new home, your lender calls with bad news. It turns out some of you income is based on bonuses, and can’t count as salary. Or your student loans were deferred and the underwriter can’t approve your loan with that debt. Or your employer has actually hired you through a temporary agency and you are not a full time contract employee. The list can go on and on for reasons why the mortgage company can’t give you the loan. Most of these issues could be resolved in a few weeks or months, but since we are only 7 days before closing, nothing can be done. Your loan is denied.

We terminate the sale of the house due to failure to qualify for a mortgage. You get your $5000 in earnest money back, but it takes two weeks. You don’t get your inspection costs or appraisal fee back. You still have to move out of your apartment, and find a new one with only a week. You end up paying more in rent on the new place, and the whole house buying thing seems years off now.

Let’s avoid this whole mess, and go from 8 days out from moving day, through signing and closing smoothly! Get a full pre-approval before we start house shopping. I work with some amazing lenders, so please ask for a referral! Many of my clients start working with a lender to get set up for the best possible mortgage 12-24 months before they purchase their first home.