A Fort Myers mortgage broker who is now working in my office emailed this to all of the agents today and I thought it was great information. I have seen people in all price ranges speak to an ambitious mortgage broker who tells them they can get a loan and then they come to me, pre-qual letter in hand, wanting to go home shopping. Then they find out the pre-qual letter the broker wrote is meaningless because it is by no means an approval for a loan or acceptable to a seller as proof of real estate financing.
I made the mistake in the past once, which I remember all too well, of taking the word of a very legitimate banker who wrote a glowing pre-qual letter for the owner of an enormous company and I wrote a $600k + home contract for that buyer based on the pre-qualification. The offer was accepted because of my strong reputation, not the letter. Then in the approval process for the loan there arose a mountain of tax and corporate legal issues that would have made it difficult for this guy to buy a Toyota. Needless to say, that will never happen to me again, but I am still approached by buyers with pre-qual letters only. Here is a good explanation of the difference.
Pre-qualification is the first step in obtaining mortgage financing. A potential borrower answers a few questions to provide the loan consultant with a quick snapshot of the borrower’s income, existing debt, accumulated savings and whether or not there is a co-borrower. Signature(s) allow the loan consultant to run a credit report and begin to determine what loans are good candidates for this particular client. However, there are literally thousands of loan programs available. It is important for the loan professional to know the long-term financial objectives of the prospective homeowner.
Pre-approval is a written documentation that proves the borrower has the full support of a lender. It means the form 1003 Uniform Residential Loan Application has been completed and reviewed by an underwriter. Based on the borrower’s income, debt ratio, and savings, the underwriter will provide a dollar amount this borrower is eligible for. Now the borrower has the convenience of shopping for a home in the price range agreed upon by the lender.Pre-approval allows potential homeowners to shop as cash buyers, and that means negotiating power. Sellers will take an offer from a pre-approved shopper much more seriously and may even accept a lower bid because they know the financing is in place and the deal is secure.
I am more than happy to put you in contact with several Cape Coral and Fort Myers Mortgage lenders if you do not have your own, but when we shop for properties you will need a pre-approval if you are financing the transaction. You need that prior to making an offer on a property. Preparation is the key to a successful transaction and I am here to assist you anytime. For additional information on a Fort Myers mortgage please go to www.FloridaLuxuryBroker.com.