Mortgage Advice

Buying a Home? Why You Need a Pre-Approval

Those searching for a home today will find that property inventory has cratered to a 30-year low and that there are often at least two other rival offers on every home. What can you do to make your proposal more attractive than your opposition?

While “cash is king,” most prospective buyers lack enough of it to waive financing, so most buyers are in need of a mortgage. With the limited inventory, most offers are at list price, or even over. As a result, many real estate offers have become essentially identical. How, then, does a seller distinguish their bid?

One of the most compelling answers that is often overlooked is to obtain a pre-approval.

Where a pre-qualification is basic and can sometimes be unauthenticated, a genuine pre-approval mandates that all relevant evidence of income and credit must be present and validated at the time of application. This data is processed and underwritten by mortgage operations professionals who produce a Mortgage Commitment. By contrast, on a standard pre-qualification, the income and asset documentation and even the credit report can be lacking. The absence of paperwork to authenticate a pre-qualification can sometimes result in a transaction that cannot be completed.

A pre-approval typically stipulates that the mortgage commitment is subject to an executed Agreement of Sale, satisfactory appraisal, proof of sufficient assets, and title reports as well as some additional conditions, as applicable. The pre-approval is a credit commitment that eliminates the speculation of qualifying. The seller and listing agent can be certain that the buyer is both serious and viable. With a pre-approval, the mortgage applicant and their realtor representative can proceed into residential real estate offers with confidence.

An added benefit to the pre-approval is speed, which in this market presents another competitive edge. Since the credit package has already been cleared, half of the application has been processed even before a property is committed to contract. A buyer with a pre-approval can thereby negotiate a quicker closing date than that of their borrowing competitors which appeals to sellers in this tight market.

Univest offers pre-approvals as a free service. The pre-approval process can be accelerated with the Univest Fast Track platform, where complete application packages receive a direct-to-underwriting review. Securing a pre-approval in conjunction with Fast Track will facilitate a more appealing offer and differentiate you from the competition in this red-hot sellers’ market. For more information, contact Univest Home Loans at 877-723-5571.

  Equal Housing Lender  

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