Upstater

Before I sold real estate, mortgage pre-approvals made about as much sense to me as pre-engagement rings. I mean really – do it or don’t. What’s this “pre” stuff?

I still wonder about pre-engagements. But when it comes to mortgages, it’s important. I’ve seen the difference it makes. A mortgage pre-approval means you’ve checked with a lender, you’ve got your finances in order and you know how much house you can afford. It doesn’t mean the lender promises to give you a mortgage, but it’s a preliminary green light that indicates to any seller that you’re a qualified buyer.

I heard the obvious relief in a selling agent’s voice when I told her the pre-approval that accompanied my buyers’ offer was a hearty one from a local mortgage agent who she knows. Not only did the paperwork look good, but it was done by someone the agent could vouch for with her seller. It was a solid offer.

On the flip side, I heard the concern in a selling agent’s voice when a second buyer offered a pre-approval from a dot com lender from out of state. She had never heard of the lender. She immediately wanted to know why they hadn’t applied locally. She presented the offer to her clients, who immediately countered that they wanted to see a pre-approval from a local lender. The negotiations were off to a shaky start; the sellers weren’t sure they could trust that the deal would go through.

I’ve seen clients disappointed when they find the house of their dreams. After they’ve found it, they frantically go searching for a pre-approval, only to find that house is out of their reach.

I cannot recommend strongly enough that you get that pre-approval in hand before you go house hunting. It’s your ticket to the game. And it gives you peace of mind knowing you’ve got a handle on your finances and can make a smart buying decision.