Right now if you are looking to buy a home you probably already know that there are more buyers than there are properties! What does this mean for you? Well, it means that getting pre-approved is even more critical. Most sellers won’t even look at an offer unless you have a lender letter. Although in some cases, a lender letter can hold no ground, which means you need to be mindful if you are receiving a lender letter without providing any financial documents.
“What does that mean?”
It means there are many lenders out there that will provide a lender letter for you without physically looking at your financial documents. You may be asking yourself, “What is wrong with that?”, “I know I make decent money, my credit is fairly good, I pay my bills on time, and I have a steady job, so there is no reason why I couldn’t qualify for a mortgage.”
Well, I don’t want to burst your bubble but just because you “say” you make “x” amount of money and you “think” your credit is good or that you have a full time job which you have been at for 4+ years. This doesn’t mean that you’re not telling the truthBUT there may be areas where this can fall into a gray area. Per your credit report, your pay stubs and your W2’s, this may not be completely accurate. This is why a lender needs to review the documents to make sure there aren’t any unforeseen issues or “gray areas”, that could cause your loan application get denied, after your under contract.
My team and I know that pre-qualifications are not an option. If you call my office wanting to see what you qualify for and if we can give you an approval, we won’t give you an approval or provide you with a lender letter unless we review all your financials, as per my previous blog Pre-Approved vs. Pre-Qualified.
Last month our office had 8 clients whom came to us AFTER getting declined from another lender, asking for help while because they were under contract. Their current lender didn’t look at their complete financial picture before sending them a lender letter and allowing them to go under contract.
Going under contract without being pre-approved is dangerous, you are setting yourself up for unnecessary stress, headaches and possibly disappointment. Yes your rate and fees are important, but really are irrelevant if you can’t qualify. Again, I can’t stress this enough, be on high alert if you are looking to get pre-approved and your lender doesn’t ask you to send over your financial documents (paystubs, bank statements, W2’s, tax returns) before giving you a lender letter!
As always if you have any questions please contact us, we are always eager to help.