Financing

Pre-Qualification Is Beneficial!

Whether you’re paying cash or securing financing with a mortgage, financial pre-qualification is the most important subject to discuss with your representative early in the purchase process. When properly representing a buyer’s best interest, it’s important for a real estate agent to be prepared to write an offer that includes proof the buyer has the financial ability to consummate the transaction.

 

Satisfying The Seller

You’ll be asking the seller to remove their property from the market as an active listing, while you meet your contingency dates; therefore, the stronger the financial evidence you include with your offer, the more likely it becomes that the seller will accept your offer. Your proof of funds will help a seller trust and believe your pre-qualification is evidence you are serious about consummating the transaction and you’re a safe risk.

 

Pre-Qualification Versus Underwriting

If you are a buyer who will be applying for a mortgage, never assume you are truly and correctly involved in that process without understanding it fully by having your lender outline the steps you must complete. Understand that a pre-approval letter is typically a quick and shallow look at your financial ability to perform because it does not represent that a full underwriting process has occurred. During a full underwriting process, the potential borrower is vetted through a thorough examination of personal financial documents, such as tax returns and bank statements. The borrower may even receive a loan commitment with final approval conditions attached. It’s critical to understand the timeframe within which the financial process will be completed to adhere to finance contingency dates as outlined in an offer to purchase or a purchase and sales agreement.

 

Cash Purchase Proof Of Funds

When it comes to paying cash for a property, you may feel a reluctance to share your bank statements and rightfully so. Therefore, we suggest the alternative is to request a simple letter from the financial institution with the funds secured. Such a letter, written on the letterhead of the financial institution, may be your greatest advantage in securing a contract versus other less competitive bids.

 

Conclusion

We realize learning more about obtaining pre-qualification or proof of funds may require assistance, so please contact us to discuss the matter further.

 

 

Understanding you must start the property purchase process by learning how to secure financial pre-qualification or proof of funds will set up course module #3, where you’ll learn how to refine your search for the property features that are most important, while understanding what the money will actually buy in today’s marketplace.

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