March 25th, 2013

bored girl

Most humans I know wait to do things. And wait as long as they can. Even for a mortgage, they wait and take their time in submitting the needed documents. I procrastinated 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 is not possible. If you are going to get an accurate, well documented, detailed, and valid pre-approval, it is going to take time. Detailed number crunching, documentation, and underwriting are all required. A quick phone call with a loan officer and them spending five minutes on a calculator won’t cut it. It takes much more.

A real example

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. I asked 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. Not without documenting all the necessary financial documents. If I could not deliver it would not be fair to the seller, nor to the buyer.

Why does it matter?

In this competitive market buyers should have their pre-approvals done far in advance. A pre-qualification 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. As a seller, you can see why a full pre-approval letter carries a lot of weight. A seller does not want to allow their house to go under contract and show it as “pending sale” unless the buyer is a sure thing. Once a home is pending sale other potential buyers won’t look at it. Imagine being told 3-4 weeks after accepting a buyer’s offer that the buyer cannot get their loan approved?!

To contact me to discuss your pre-approval, mortgage rates, or other mortgage questions, click here to schedule a call or you can email me directly.

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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