Loan Pre-Qualification. How? Why?

[DERIK] What’s up everybody? Today, here at Keith Home Team we’re discussing working with lenders and why we want to get pre-qualified for a loan. Good stuff. Let’s do this. I need some pizza…

[CALEAB] All right Crys, I have some questions for you. So, I know how much money I make. I know my credit’s awesome. Why in the world do I need to go talk to a lender to get pre-qualified to check out some homes?

[CRYS] That is a good question. There are many reasons. First of all a lot of your sellers are going to ask that we only bring qualified buyers into their home to look at it in the first place. As you can imagine, not everybody wants to get their four kids, clean up the house and get out to show their home just to find out that you aren’t qualified. So, they always ask us, regardless if the market’s hot or cold, they want to see that.

[CALEAB] But, I’m pretty sure, that I just want to see this one home.

[CRYS] Before you go look at this one home, if it’s the one, are you ready to buy it?

[CALEAB] I should be, if I have my credit, my money and I know how much I make. What else is there?

[CRYS] When you go to meet with your lender, you’re going to bring your pay stubs to get a true qualification, not a pre-approval. So, you’re going to have to bring your pay stubs, your W-2’s, your bank statements and they are going to look at your debt to income ratio. They’re going to look at all of these different things besides just your credit score to decide what type of loan you qualify for. The type of home you may be looking at doesn’t even qualify.

[CALEAB] Is that going to hurt my credit?

[CRYS] You are going to get your credit pulled but once it is open you can shop around with lenders.

[CALEAB] SO, I can see more than one lender. It’s not just set to one.

[CRYS] Correct!

[CALEAB] Now that I have my pay stubs and everything is sent to my lender and I shopped around a little bit and I really chose one, why is it so important for me to get going quickly?

[CRYS] You’ve seen how quickly homes are moving, right now in the market. Some of them are multiple offers within the

first 24 hours. If you haven’t already met with your lender and you don’t have this lined out and don’t have your pre-qualification in hand, and even if you have a good basis and you know what type of loan you’re looking at, what type of payment you’re going to be getting and what your interest rate is. Even if all of that is correct, in the time that you are able to meet with your lender, get them the documentation and get that pre-qualification letter in hand so you can go ahead and place your offer, somebody else has already got that home. It’s that fast.