Why Tampa Bay Real Estate Agents are SO Fussy About Mortgage Preapproval Letters

Tampa Bay Real Estate Agents and Pinellas Realtors® like us that are producing results in this market understand how the rules of the game have changed for 2012 and why savvy home sellers and their agents are SO darned fussy about mortgage pre-approval letters lately.  If you will be in the market for a home soon, this may want to make you cover yours ears, but it’s critical information to know.

Why Tampa Bay Real Estate Agents Are So Fussy – Part A

Beware that today even buyers with top credit scores and ample savings have to undergo a LOT of scrutiny to get a mortgage.  We often joke that it doesn’t matter if  you’re Donald Trump, you ARE going to have issues come up during underwriting, and so smart home buyers should get their ducks in a row before starting to look for homes – even online.  Trust us, even people with 780 credit scores routinely get last-minute questions and requests for documentation from underwriters.  In fact, more often than not, the better off your are financially the more complicated it can be.  Huh?!   Let’s make sense of it ….

Tampa Real estate agents and home Sellers are rightfully fussy about your loan pre-approval – and here’s why you should be, too.  Whether you’re just beginning your home hunt or perhaps just submitted an offer on a home with your pre-approval letter in hand, you might be getting what seems like a million questions from your agent or the seller’s agent about your choice of lender or pre-approval letter.  I’m rock solid financially, why don’t they just back off and stay out of my personal business, already?!?

Well, the reality is that many of these so-called approval letters aren’t worth the paper they are written on!

How in the world can that happen?  Can a mortgage broker or bank really issue a pre-approval letter and tell me everything’s great and it’s really a big fat lie?  Very easily.  In their haste to lock in a customer quickly, most lenders today still will tell you what you want to hear without obtaining the necessary documentation from you.  Either they don’t want to scare you off at first meeting by prying to much or don’t want to invest the time with you to collect it – often times before you’ve even found a house or professional Tampa Realtors® like us to assist in that process.

So, the actual letter itself gets issued, you feel good, but is essentially worthless at this stage of the game- whether it’s a “Pre-Qualification” letter OR a “Pre-Approval” Letter.   The key thing to know is that it’s the Pre-Approval letter you’re after, and if you didn’t have to submit ALL of your financial documents and sign a formal credit application in order to get that letter, then it’s not worth the paper it’s written on.  And here’s the clincher – you may have been quoted an interest rate and terms, but NO lender can truly quote rates and terms without pulling your tri-merged credit report, personally verifying your employment history and reviewing ALL of your supporting documentation to ensure you’ll truly qualify!

A savvy lender is going to know what underwriters are looking for and will take the time to review all of your documentation.  Then, they’ll invariably have MORE questions, and might need more documentation to back up the potential red flags the underwriter WILL find.

They’ll be scrutinizing ALL of your banking account deposits and withdrawls, your retirement accounts, your other assets including real estate, your 401K, your tax returns, your marital status and any recent changes, child support payments, credit card account statements, your debt to income ratio and your credit history, and a few other things possibly, too.

Is This a Fun Process?  No!  Yet it’s nothing to be scared of and at the end of the day you’ll be glad you faced it head on BEFORE home hunting.

Feel free to start your Tampa Bay home search here or give us a call at 727-366-0325 if we can assist or refer you to some terrific Tampa Bay lenders.  And stay tuned for Part B of “Why Tampa Bay Real Estate Agents are SO Fussy – Part 2″ where we’ll detail the differences a pre-qualification and a pre-approval and how to get a Pre-Approval that’s worth the paper it’s written on and save yourself a LOT of grief!