(Part 1)
Working with a first-time home buyer can be a lengthy, Complex, and often times challenging process. Tis is why having an agent checklist may be a valuable tool to help you stay focus and on track during this process.
There is a rule in business called the 80/ 20 rule. According to this rule 80% of a business’s profits come from 20% of its clients. Most business owners will confess they have clients that aren’t profitable. They are good people and have good intentions but they burn a lot of time. Time spent on them is time they can’t be spent on others. To help avoid the time wasting which some well-meaning potential clients fill I advise agents to ask their potential clients to get a pre-approval letter from a lender.
Beware some people and some lending institutions recommend a pre-qualification letter. There is a vast difference between the two. A prequalification letter does not require the use of verified information to grant you the approval, but a pre-approval does. A pre-qualification letter is the lending institution say we think based on the information we have been told that we’ll lend them X amount, whereas the pre-approval letter says based on this verified fact we will lend them X amount.
People who are willing to go through the time and effort to go to their lenders and get their pre-approval letters are typically more motivated clients. Notice I said lenders. I recommend that potential clients go through the process with at least three lenders so they can negotiate better terms.
During the Covid-19 epidemic realtors were required to show at least their client’s per-qualification letters before they could show a property to a client. There were other rule and regulations in tact but that one lingers because it weeds out time eaters.
But there are other advantages to help you better serve your client that the pre-approval letter brings:
- They provide an accurate credit check.
- These letters require a hard credit enquiry
- They accurately gauge you credit worthiness by lending institutions
- If you do not qualify, you’ll know exactly why, and then you can be shown ways to improve your credit worthiness.
- A pre-qualification letter or a preapproval letter is often time still needed in order to show a property.
(Note) A pre-approval has better strength when making an offer.)
- The pre-approval letter shows you how much you can borrow and many times it gives you general break downs for various amounts.
- The pre-approval letter helps the home buyer accurately develop their budget.
How to obtain a pre-approval is easy. You can apply on line, in person, or often times over the phone.
Most lenders look for the following documentation:
- Prof of income
- Employment history
- Your credit history
- Total assets
- The amount you want to borrow
- Amount of earnest money
I do not recommend any lender by name, but for my clients convivence I have four lenders contact numbers at hand.
I recommend going to your credit union for these letters.
The for large lenders are:
- Rocket Mortgage (888) 111-3333
- AmerciSave Mortgage (886) 595-0913
- Quicken Loans (909) 251-9080
- Veterans United (800) 884-5560
Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.
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