***if you know anyone who is thinking about buying a
home, our next classes are:
Monday, December 10, 2012, from 5pm-8pm, at the Marshall Center, conference room at 1009 E. McLoughlin Blvd. (kitty corner from Clark College)
Saturday, December 15, 2012, from 1pm-4pm at the Vancouver YMCA located at 11324 NE 51st Circle (corner of SR-500 &
112th/Gher Road).
See ya in 2013!
Remember….with reservation…we will throw in lunch, or dinner! 🙂 …we also have other class dates/times…check out the website
Please go to www.learningtobuyahome.com, or www.traciedemars.com for information on ALL upcoming Free Community Home Buyer Classes. I do keep all updated information, and directions there… I would love to hear from you about when you might like to see the classes. These classes are for you, so please, I love your comments and feedback!! 🙂 ***
Happy Sunday~
Ok….Happy Monday morning! Sorry for the delay as I just got home from a family vacation late Saturday night and slept most of Sunday away as we were beat. 😉 Luckily we deep clean the house BEFORE we leave for vacation so we don’t feel bad for
sleeping and relaxing the day we get home. I know…weird, but when we go on vacation we don’t relax. For some reason we can’t just lay around and relax; we like to go run around and check things out. Did I mention we went to Disneyland for our 3 year olds birthday? Now you understand why we are so tired! Our 16 year old son got that nasty cold right as we got to Disneyland, but trooped through it because well….we were there and it is Disneyland. Poor thing had to go back to the hotel and take naps with the 3 year old! 🙂 Thank goodness I overpack and brought cold meds with me….just in case!
So, while I was gone I had all sorts of things happen at work. Chris is such a great guy that he tried to take care of everything with my managing broker while I was gone so I could have a family vacation as it was our first one in three years, and we had saved up for it. One of the things that did came up was a misunderstanding about what a pre-approval means, so let’s go there today.
🙂
What is a Pre-Approval? What does it take to get one? How long does it take to get one?
A pre-approval from a lender is a snapshot of your current financial situation….DON’T change it once you get your pre-approval without discussing any changes with your lender first. Even paying off, and closing a credit card can negatively affect your credit. Weird….I know! A pre-approval will require the lender to have copies of your W-2’s for the past couple of years, 3 months of bank statements, 1-2 months of pay stubs, and of course, the lender will pull your credit. It can take about a week (on average) for a pre-approval from a lender.
Some other ‘pre-approval don’ts’….
Don’t cut your work hours as your pre-approval is based on the number of hours you have been working. Cutting your work hours can lose you your pre-approval and financing…and so can working too many hours if you are using a special loan program like the downpayment loan program.
Don’t pay your bills late! I know this sounds like common sense, but 33% of your credit score is based on paying your bills on
time. By being late on your bills you can lower your credit score.
Don’t miss a payment! Again, common sense, but if you miss a payment…even a small one for say, $25 you will lose your
pre-approval as it will really hurt your credit score.
Don’t assume because you have a pre-approval that checked all your information that your lender won’t know if you do any of the above. When your file goes to the underwriter they will want an updated copy of your bank statements, your current paycheck stubs, and yes, an updated copy of your credit score.
Remember that when getting a pre-approval that the lender is actually pre-approving you for a monthly payment and not for the actual dollar amount of the home purchase. WHAT?! Yeah…it is true. The way it works with pre-approvals is that the lender looks at your income, and the takes away your known debts like car payments, credit cards, etc, and this is your debt to income ratio. Each loan looks at a different percentage of debt to income ratio for your pre-approval. The lender then adds in an average for your home insurance and your taxes since this has to be added into your payment…and then your lender has to look at current interest rates. Most lenders will base your pre-approval on a higher interest rate since your interest rate can’t be locked until you have a signed around purchase/sale (an offer that is mutually accepted by the person with the legal authority to sell the home.)
Be aware that your pre-approval amount can change over time depending on interest rate fluctuation, property tax fluctuation, and more. A pre-approval is only good for 90 days and then must be updated if you haven’t already found a home. When in the process of buying a home, at the time your file goes to underwriting, the underwriters will still want to update everything.
As a home buyer you need to be aware of your budget, and the debts that are not part of that pre-approval process. We all have lives, and you want to enjoy yours…not be house poor….or to not have enough money left over at the end of the month to do those things that you want for fun, or for the home.
Why is the pre-approval so important before you start looking at homes?
A pre-approval with a lender is important to both you and your agent for a couple of reasons. For the buyer the pre-approval is important as it helps you to know what you can comfortably afford, and what types of loans what might work best for your family. You don’t go grocery shopping without knowing how much money you have in the bank, you should never go home shopping without knowing how much payment and home you can comfortably afford. Your home payment is much more than your mortgage….A mortgage payment will include your principal on your loan, your interest, your property taxes, and your home insurance….this is what’s known as a PITI payment. (Principal, Interest, Taxes, and Insurance). See last week’s blog for more information on that.
For your agent having a pre-approval already is important because your buyer’s agent wants to show you homes that you will love, and that you can afford. We don’t want to show you a home that you fall in love with, but find out you can’t afford. When this happens it is hard to find another home you love as much as the ‘home that got away’. It is better to start looking at home that are in a price range that is comfortable for you, and your family.
Another reason for a pre-approval is that if you find a home you really like you can’t even make an offer without your agent being able to include a pre-approval letter from your lender within a couple of hours. In this market your offer can
not, and will not, be considered by the seller without the pre-approval letter. Homes that are in good shape and that are well priced sell fast, and you can miss out on the home you want waiting for a pre-approval to come in.
In short, your pre-approval is your passport to you home buying adventure. First step in any home buying adventure should be the home buyer classes, but the second step is talking to an experienced lender who can offer ALL the loan
programs. I know a lot of real estate brokers will tell you to talk with an agent first, but realistically there isn’t a lot we can do for you without that pre-approval letter from a lender. A good lender will sit down with you and see where you are at, where you want to be, and help you with a plan to get there. Remember that, just like a buyers agent, the lender works FOR YOU! We are in the customer service industry….this means that we provide services to you…. give me or Chris Berg at Pinnacle Mortgage (503-320-0925) a call and we will be happy to help!
Enjoy the weather, and the holiday lights. I look forward to talking with you soon and helping you to find a great home!!! Thank you for your referrals as well….I couldn’t do this without you! Hope this helps….as always, give me a ring, text, email, or facebook me if you have any further questions!
😉
Please call, email, text, or even facebook me (at Tracie DeMars Real Estate) anytime with any questions, or if there is anything
I can do to assist you with your home buying adventure! As your buyers agent, I am, as always, here to help!!
😀
Thank you again for your business and for your referrals!
…as always…if you have already purchased a home, or no longer would like to receive these emails
from me, please let me know and I will be happy to remove you from receiving any more.
Thank you again for attending the home buyer education classes, and I hope that you will continue to refer the classes out to
your friends, family, and co-workers. Upcoming class dates and times are located at www.freehomebuyerclasses.com. Just click on the link on the left hand side. Or you can go to www.learningtobuyahome.com and click the links.
We appreciate your referrals and word of mouth! Also, if you have somewhere that we can place the flyers at, please let me know….
:-D
Next Week: Mortgage Payments & how they’re Paid (coming up – Inspections…explained & Mortage
Insurance….explained)
Last Week: Mortgage Payments explained…part one
Remember that you can always go to ‘Tracie DeMars Real Estate’ on Facebook for all of my weekly blogs and upcoming
class dates/times/locations. I post the weekly blogs on there as well.
Have a great day, and I will talk to you soon,
;-D
