Would you go to the clothing store, spend hours trying on clothes, seeking what you wanted and then later wonder if you had the money to pay for it? I don’t think so. You would know that you had cash or a credit/debit card before you began the clothes-trying-on process. It’s the same thing when buying a home.
What I’ve learned is…
Every buyer is uncomfortable discussing their personal financial situation, and
An offer to buy a home without being pre-approved is a very weak offer.
If you wish to buy a home, you’re going to have to discuss your finances, because no one can buy a home without a financial disclosure.
When first meeting you, I will question you about your financial qualifying, but I won’t delve into it, because I don’t personally need to know your entire income, expense or credit history. But, I do need to be assured that you are taking steps to become financially qualified by a lender to buy a home before we actually go shopping. Which brings me back to the second thing I’ve learned.
Making an offer when you have a commitment letter or pre-approved letter in hand is the same as making a cash offer. Sellers weigh offers based on the buyer’s financial strength to actually complete the transaction. A letter of commitment tells the seller that you can buy the home. This is the best negotiating position you can be in.
Remember, there is a big difference between pre-qualification and pre-approval. When getting pre-approved, you submit information and figures to a loan officer who then calculates for you a specific home loan dollar amount that you should qualify for. Pre-approval means all of this plus the loan officer has confirmed credit history, income verification, as well as assets, liabilities and sources of down payment funds.