Getting pre-approved is a very important, first step in the home buying process. Regardless of whether you are experienced with the process or a first time buyer it is very important to know exactly where you stand financially before considering a new purchase. Mortgage lending guidelines are constantly changing, and due to the economic instability over the last few years, mortgage lending has changed drastically. There are also issues that may arise on your credit of which you are unaware. Most errors can be rectified easily, but it will take time for the reporting to be updated. It is best to deal with any errors prior to having committed to a specific timeline.
Although pre-approvals are extremely important, they should
not be relied on 100% at the purchase time. It is important to have a full
approval of both the applicant and the property before considering the
financing to be secure.
Once you are pre-approved it is important to be aware of the different factors
that may change your pre-approval. Here are a few examples:
The information given in your pre-approval application is not correct
Your employment changes
Your debt ratios change
Your credit changes
Your marital status changes
Property taxes for the new purchase being higher than average
Properties
that are unique. Some properties may have specific attributes that some lenders
will not allow. Here are a few examples:
Post grow-ops
Preserved wood
Log homes
Mobile Homes
Foreclosures
Private sales
Water wells / septic tanks
Rural properties
Acreages
Properties where there is substantial value in the outbuildings
Bare land
Alternative sources of power or heat (ex. Generator, wood stove ext.)
Multi-unit housing
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