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you are pre-approved.....

Published Jan 3, 2006 by Judy Marciano | E-mail this post

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But that doesn't mean that you will definitely get a mortgage.

Customers don't always understand the difference between "pre-approval" from a mortgage company vs an actual "mortgage commitment".

Pre-approvals are necessary in todays market because most sellers require a copy of a pre-approval letter with any offers to purchase their property. Yet, pre-approvals are only the first of many steps to actually get a bank to commit to a mortgage. Of the entire buying process, getting a mortgage is the most time consuming part of your timeline.

A pre-approval deals only with the qualifications of the person applying for the mortgage, based upon the persons own statements. However, once you decide on a mortgage company and actually apply for the mortgage, all these statements must be verified and very importantly, the unit and building itself must meet the standards of the mortgage company.

Get a copy of your credit report early in the buying process:
The first obstacle to overcome is determining your credit status. Your credit score, commonly known as your FICA, is a system that analyzes your credit accounts, type of accounts, number of credit inquiries and much more. Most people assume they have good credit only to find out that there was some late payment or unauthorized use of a credit card or other factors that you would not normally consider to affect your credit (ie., not having enough credit, having credit cards with high limits, etc.).

Shop around for the right mortgage broker, make sure that you feel comfortable with your mortgage options:
In todays market place, there are many different mortgage programs, a mortgage broker might sell you on a mortgage program that will cost substantially less than a normal 30 year conventional loan but then as the process continues you might find out that the building itself, does not qualify for this loan type. For example, Hudson Tea in Hoboken - people discovered at the last minute that the mortgage program they selected would not lend money to the Tea Building because the ratio of tennants to owners was over 50%. This is a very common rule for most buildings and can affect your obtaining a mortgage.

Appraised value:

Make sure your realtor provides you with a few comparable sales to the property that you plan on purchasing. Your realtor should also provide the appraiser with these comps during the actual appraisal. Make sure that your mortgage company orders the appraisal immediately, don't wait until the last minute because once you are beyond the mortgage continguency clause in your offer to purchase contract, you might be at risk to lose your deposit if the property does not appraise.

There are so many other issues but I will end it with this last one for now:

Sometimes condo associations prohibit pets which would clearly prevent me from buying a place like this as I do not plan on giving up my wonderful dog, Roxy to live in a place where she would not be welcome. So if you also have a wonderful pet, make sure they are allowed.

Very rarely does anything go smoothly, so don't plan around an exact date to close on your property. Allow some time for the unexpected...and employ experienced professionals, inclduding your realtor, mortgage broker, lawyer and home inspector.







About me

  • I'm Judy Marciano
  • From Hoboken, NJ, United States
  • Thanks for checking out my blog. I am a full time licensed NJ real estate agent in Hoboken at Empire Realty Group. As I go thru Hudson County each day, often I stop to take a picture. Feel free to contact me for any real estate assistance at jmarciano@empiregroup.com

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