DON’T WAIT!

March 25th, 2013

brian-martucci-waiting-to-get-preapproved-blogMost humans I know wait to do things, and wait as long as they can. I did it as a child when it came to cleaning up my room, I did it in college when it came to studying for an exam, and I do it as an adult when it comes to going to see the dentist. The only things that I do not procrastinate on are things that are really important, like getting pre-approved for a mortgage. Now that is important! That should be done right away.

Why do I say this? I say this because people do not realize how important it is and how long the process takes. People also do not realize that they could find the house of their dreams and not be prepared to make a competitive offer. They’re going to expect a mortgage lender to pre-approve them immediately, and that may not be possible. If you are going to get an accurate, well documented, detailed, and valid pre-approval, it is going to require a few days, some detailed number crunching and documentation. It does not simply require a quick phone call and five minutes on a calculator, it takes much more.

I had someone recently who I had spent six months trying to get documentation from them in order to go through a full pre-approval process, but they always ignored my calls and emails. Then they called me Sunday morning and said, “We just found a house we love, we have to make an offer today, can we get pre-approved right now?!” I said I could try to rush things, but it would depend on the complexity of their scenario, and if they could get me the necessary paperwork immediately. They said, “But we just want a pre-approval, can’t we get one real quick by talking on the phone?” It was as if a pre-approval was simply a coffee you stop and pick up, real quick. Unfortunately, I cannot issue a formal pre-approval letter founded on no documentation and put my reputation on the line, for the largest financial transaction most of us ever undertake, without documenting all the necessary financial documents. It would not be fair to the seller, nor to the buyer, if I ultimately could not deliver.

In this competitive market, buyers should not only have their pre-approvals done far in advance, if they really want a leg up on the competition they should get a full commitment letter! To get a full commitment letter you have to submit all of the same income documentation that you would on any formal loan application, go through a formal underwriting process by an underwriter, and you would get a commitment letter that is only contingent on getting a satisfactory appraisal. This is the highest level of loan certainty you can get, and it will make your offer stand out in a competitive market. A pre-approval letter, even a well documented one, is not underwriter reviewed nor is it a formal loan commitment. What it really amounts to is an opinion of a loan officer, hopefully an educated opinion, and hopefully one based on documentation. That is a lot of hope! As a seller, you can see why a full commitment letter carries a lot of weight. Who wants to allow their house to go under contract, and show it as “pending sale” in the multiple list system, which means other potential buyers won’t look at it, only to be told 3-4 weeks later that the buyer cannot get their loan approved?

We should all write on our bedroom wall tonight (or in an iPad note taking app)…

I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.
I WILL PROCRASTINATE LESS.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.​

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