Getting pre-approved on a home loan is vital in this market. Now I’ve previously written about this topic. Currently the market is on fire! If you haven’t heard or if you have been hiding under a rock, you may not know this. If you have been out there looking and haven’t gotten pre-approved then when you go to put an offer on a house you want, you will be hit with a rude awakening because your offer will not be accepted and the seller will just go to the next 5 offers that will include their pre-approval letter from their lender.
Right now with the market’s feverish pace we are hearing that properties are getting multiple offers within hours of being listed. Most buyers are bidding over list price and going under contract by the end of the day. This is really insane! Like Cypress Hill once said “Insane in the membrane, crazy insane got no brain”
This is why I am stressing the importance of getting pre-approved! You need to provide NOT only a lender letter with your offer, but it better be bullet-proof and your lender better have a good reputation in Denver. Getting pre-approved does not mean calling a lender, asking them their rates and giving them your credit score and income over the phone. That would be a pre-qualification and most lenders these days will not provide a lender letter with only a phone conversation. At least not the trustworthy lender. As a lender we don’t want you putting an offer on the table unless we know you can close. This means we need to run your credit AND review your financials (W2’s, pay stubs, tax returns & bank statements) to start. We also need to verify you have sufficient funds to close on the house. If those funds will be gift funds we need to know who from and how much.
Last but not least, this is super important, if you need down payment assistance ASK THE LENDER IF THEY OFFER DOWN PAYMENT ASSISTANCE PROGRAMS! If you are needing down payment assistance this should be the first question to ask your lender. Also ask if they have multiple outlets not just one program. This is hyper-critical! Why would you bother getting pre-approved to only find out that the lender can not provide what you are needing?
Ask questions, research and make sure to discuss your needs, wants and plans with the lender in order to find all the best options available to you.