Monday Real Estate Market Myth: Value of a pre-approval

Myth: A home buyer believes that they can purchase a home without any issues, once they have an approval letter.

FALSE:  While an approval letter is important when starting your home buying search, it really does not compare to the direct underwriting approval/guaranty.  A pre-approval is basically the lender reviewing general documents  from a borrower upfront to determine the highest amount of loan they qualify for based off their income, debt, and few other commitments.  Until a buyer has a direct underwriting approval or financial guaranty– which usually takes 17 days after an acceptance of an offer on a property–  the buyer may be at risk of not getting a loan per the lender’s requirements.

State laws, lender institutions, and other company policies along with the buyer’s changes  such as unemployment or income decrease all have a large effect on a buyer which jeopardizes their possibility of home ownership.  The lender may require additional documents until the very end of the transaction, so it is important for a buyer to be honest and careful until all documentation is signed and they have the keys.  Anything can happen until then…

For further information ask local real estate agent Kristen Jurevich at 831.635.6719 for information on a reputable lender to help with a transaction.


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