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Free Real Estate
Reports
Home Buyers:
Four Reasons to Get Pre Approved
Before Looking at Homes
Many home
buyers may not realize the importance of getting pre approved by a mortgage officer before looking
for a home... even if they already own a home. There are at least four very important reasons to get pre approved before you begin looking
for that new home.
First, almost half
of the homes on the market today require a pre approval or pre qualification letter to be submitted with any
offer. These homes are usually short sales or foreclosures. The seller, in this case, is a bank or lending
institution. It is very common to find a really great buy on these homes. However,
if you have to wait for the pre
approval process to be completed before you can submit an offer on a home, you run the risk of losing
the home to another pre approved home buyer. Good deals usually close very fast.
Second, the interest
rate that you qualify for is dependent upon your credit score. For example, if you have a credit score of
720 or higher, your interest rate could be as much as a quarter point lower than the published interest rate.
That's very substantial when it comes to your monthly payment.
Third, when you are
a pre approved home buyer, you take out the guess work of knowing what home you are able to buy. This can save you
a lot of time and money, not to mention the frustration of falling in love with a home and finding out you can't
qualify to buy it. When you find that home that really meets your needs, you want to be able to move on purchasing
it as soon as possible.
Finally. there have
been so many changes in the lending process during the past six months, you need to talk with a lender about these
changes. Current real estate practices take longer to
close than in the past.
For example, a good
lender will give you a good faith estimate of what it will cost you to purchase a home. This is called Truth in
Lending. There is a minimum 3 day waiting period before the lender can collect any fees from the buyer. This in
turn also means that the appraisal will take longer to
order.
Also, if the Annual Percentage Rate (APR) changes
more than 1/8% before you close on a home, the lender must reissue the TIL disclosure statements to the buyer.
Again, there is an additional 3 day waiting period.
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