Before going out and viewing lakefront dream homes, it’s important to understand what you can comfortably afford. It’s no fun falling in love with a home only to find out you can’t qualify for it.
Not to mention, most sellers will now require a buyer to be pre-approved for a mortgage prior to viewing the home. You can be denied entry without it.
In addition, if you happen to come across the lake home of your dreams on a Saturday, you want to be fully prepared to put an offer in immediately or you will loose it to your competition. An offer needs to have a pre-approval letter submitted.
So that’s why most Realtors® will ask if you are pre-approved. We don’t want to know your financial information! We just want to give you the best chance at acquiring your dream lake home.
Are you a cash buyer? The be sure to have some type of “proof of funds” available for the same reasons as above.
What is needed for mortgage pre-approval (NOT pre-qualified) from a lender?
- You’ll complete an official mortgage application (and usually pay an application fee), then supply the lender with the necessary documents to perform an extensive check on your financial background, job history and current credit rating.
- From this data, the lender can tell you the specific mortgage amount for which you are approved. You’ll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock in a specific rate.
- Pre-approvals are generally valid for 60-90 days and can be updated by re-verification of some of the documents.
Key Point: Don’t give away your negotiating power! Have a custom pre-approval letter made for each offer that lists your specific offer price. You know you can afford more…but the seller doesn’t need to know that!
Posted by Scott Freerksen “The Lake Guy”