By Kathy Henne
You’ve put aside an extra $125 to buy a new jacket you’ve seen advertised. You know how much you have to spend and it’s in your pocket. Surprise! When you get to the store, you find that the jacket you expected to buy is priced at $175. Disappointment sets in, and you leave discouraged. You decide not to make a purchase after all.
Homebuyers sometimes have the same experience – in reverse. They may know the price of homes which meet their requirement, but aren’t sure how much they have to spend. That is to say, they aren’t certain about the mortgage amount for which they will qualify and if they will be comfortable with the payment. When buyers make an offer on a home and then find out the payments are higher than they expected, the buyers are put in a frightening position. They start loosing sleep and making lists of all the things their family will be doing without.
There’s an easy solution that helps avoid discouragement and frustration. Most mortgage lenders will give buyers a preapproval letter before they begin their home search. The lender simply takes an application, verifies employment, credit information and income. Then using lending formulas, the mortgage company will preapprove the buyers up to the maximum mortgage amount for which the buyer qualifies.
With a preapproval letter in hand, buyers become a valuable commodity to sellers. What seller wouldn’t want to know a prospective buyer had the funds to make a purchase? Being in a strong buying position, buyers gain greater strength in any negotiations that take place over price, terms, or other considerations. If the seller receives two offers – one that is for full price, but the buyer does not have a preapproval letter and another offer for a little less from a buyer that has a preapproval letter – which one will the seller probably take? The preapproved buyer, of course. The result is a win-win for everyone.
Contact the Kathy Henne Team Re/MAX by calling 937-778-3961