Why Getting a Pre-Approval Letter Will Help You Get a Katy House
Say we are working together to purchase your next home. (Thanks for your confidence in me!) What’s the very first thing you should do in the home buying process? I, like most Realtors, will tell you to get a Pre-Approval letter. You ask me, “Julie, what is that and why do I need one?”. You might say, “I already have a Pre-Certification letter. What’s the difference?”
So, what’s a Pre-Approval letter? Unlike a Pre-Certification letter, the lender will not just take your word for your financial status, the lender will verify the information you provide. Instead of receiving your letter that same day via fax, the lender will confirm your employment, check on the source of your down payment, pull your credit rating and check other elements of your financial situation. You may be asked to provide your year-end tax statement.
Verification of facts is the prime difference between a Pre-Certification letter and a true Pre-Approval letter. While it is more time consuming, it carries great weight in negotiations; it’s value cannot be underestimated when making an offer on a house, particularly in this time of tight credit. If faced with duplicate offers, the prospects with a Pre-Approval letter will most probably get the house.
Pre-Approval letters are not binding on the lender. They are always contingent upon an appraisal. They have an expiration date. If your financial situation changes, and the lender will re-verify shortly before you close on your new home, your rate and terms may be altered. (Do not make major purchases, change jobs or run up credit card debt before you buy your new home.) Your maximum mortgage rate may also be recalculated.
For information about Katy area homes, you can search the entire Houston MLS from this blog. For questions or to tour any area homes, contact me directly at 713-818-2404. I have specialized in Katy real estate for over 19 years. Experience does count!
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