When Your Real Estate Buyer Says “I’m pre-qualified…”


Do you know what it means when a real estate buyer is “Pre-qualified?”

It doesn’t mean a thing.

To become pre-qualified, a buyer simply gets on the phone with a loan officer and tells his or her story. The loan officer will ask for income and expense estimates and ask questions such as “Have you ever filed bankruptcy?”

Then he or she will say something along the lines of “Based on what you’ve told me, you’d qualify for a loan of $X with monthly payments of about $Y.”

And there’s the catch: The qualification is based ONLY on what the borrower has said. And guess what? Some borrowers think they can somehow hide things like a low credit score, a past bankruptcy, or an obligation to make child support payments.

Not only that, most borrowers aren’t aware of the income items that a bank won’t allow them to use in their debt to income ratios, so they can innocently mislead the lender.

Your buyer needs pre-approval, not pre-qualification.

You can only be assured that your buyer can actually purchase a house at a certain price if he or she has been pre-approved. And even then, you have to make sure it was a complete pre-approval. Unless it was a thorough job, a pre-approval doesn’t mean anything more than a pre-qualification.

When prospective borrowers come to me at MikeClover.com for a pre-approval, I collect all the same information that I would if they had already found a home and were ready to buy. Then using my Unify CRM, I verify their information and use either Fannie Mae or Freddie Mac underwriting software to get the pre-approval.

With my pre-approval letter in hand, borrowers know that they will be able to get a home mortgage loan – as long as nothing changes.

And things can change. That’s why along with the pre-approval letter I give clients a list of things NOT to do before their mortgage loan is final. Any one of these things could upset the balance and cause denial of the loan.

That list includes:
• Don’t be late on any payments
• Don’t quit your job
• Don’t co-sign for anyone
• Don’t acquire any new debt
• Don’t transfer large sums of money ($200 or more) to your account from unknown sources.

If you’re the buyer, come and see me online…If you’re getting ready to search for a home in Texas, visit me at mikeclover.com and complete my on-line form to begin the pre-approval process. With my pre-approval in hand you can search with confidence, knowing that when you find “your” house, you’ll be able to make the purchase.

Mike Clover
Mortgage Banker


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