Real Estate Financing: Why Preapproval Is Not Enough

The California Association of Realtors (CAR) standard Purchase Agreement has built in contingency periods, that are customizable, so that way you can take your time to do things like have inspections to determine if the home and property are in acceptable condition, determine if the insurance is affordable, if there are crazy neighbors, to see if the property appraises for the agreed upon purchase price, and to determine if you can obtain agreeable financing.

It’s always comforting to know that you have an option to get out of the deal if you cannot get the financing you thought you were going to be able to, but in this market you also want to be competitive.

In order to do so you have to more than just preapproved. Your file has to be fully underwritten. Talk to your lender (and if you don’t have one I can recommend a few to you) about getting fully underwritten so that when you present your offer it’s like cash.

Fewer things are more stressful in a real estate transaction than the financing part dragging on and on and, at times, doesn’t come together and you lose the property. You are going to have to do it all anyway, so you may as well do it before your sights are set on a property that you could lose because the financing part of the deal falls apart. Which almost happened at 70700 Tamarisk Lane.

It’s best to get all that done before you even write an offer because you know that YOU will be able to perform. It’s also best to work with a lender that you can work with face to face. I’ve noticed that younger people want to do everything online but that’s not how you get the best advice. The best advice is going to come from a seasoned professional, not a form on a website that accepts .pdf uploads. This is a big deal. Not a point and click deal.

If you have any questions about this feel free to contact me directly.

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Categories: Buying?, Financing, market conditions, mortgage financingTags: , , , , ,

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