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home buyers

Why Mortgage Pre-Approval is Important

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Successful house hunting starts with mortgage pre-approval – Not talking to a Real Estate Agent.

What Is Mortgage Pre-Approval

Minneapolis, MN:  Mortgage pre-approval is what happens when you talk to a Loan Officer and find out how much house you can afford. It’s an important step because it helps your real estate agent zero in like a laser beam on the correct house price for you. Your mortgage consultant will ask questions about your financial situation, including job, income, assets, debts, and more. Then you’ll talk to them about your comfort level when it comes to a monthly mortgage payment. It’s important to know this, in order to avoid buying a home you really can’t afford.

 

FHA Mortgage Loan Expert in MN and WI
FHA Mortgage Loan Expert in MN and WI

At this point, you are NOT pre-approved.  The next step to full pre-approval is submitting all your documents to the lender. Common items include; photo ID, pay stubs, W2’s, and bank statements. Once the mortgage company reviews these documents, THEN you will be pre-approved!

Here’s a look at some of the benefits to getting pre-approved before you house hunt:

  • Powerful Buyer. Sellers often give preferential treatment to pre-approved buyers since they know for sure that you can finance the purchase. If you get into a bidding war with another buyer, the seller might look at your offer in a better light than someone who hasn’t talked to a mortgage consultant.
  • Interest Rates. As interest rates go up and down, you can get in on a locked rate before they go up again. You can lock in an interest rate if you are pre-approved, as soon as you have a signed purchase contract. A lower interest rate will save a lot of money over the life of that mortgage.
  • Credit Surprises. Mortgage pre-approval reduces credit surprises.  If you wait until the last minute to secure financing and find that you have a few issues that need to be resolved with your credit, you could miss an opportunity to purchase your dream home.  Getting pre-approved will help you head-off surprises so you can go look for the perfect home.

Mortgage pre-approval is as close as anyone can get to insuring you’ll be able to obtain a mortgage loan in advance of finding a home.  Pre-approval gives MN and WI first time home buyers a definite idea of what they can afford and shows sellers that they are dealing with a serious buyer.

Are you a Serious Buyer or a Time Waster?

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Serious Home Buyer?

Minneapolis, MN:  As a professional licensed Loan Officer, I encounter people everyday that say they want to purchase a home.  But when it comes down to it, they may not be ready for that responsibility of a home,  or they are can not get pre-approved for a home loan.

In our society, it seems everyone wants everything now.  Learning that it may take a little time and some effort on the buyers part frustrates many of them them.  Being told “no” simply doesn’t register.  It amazes me the number of people who apply with me, and when I look at their credit report, I see that they’ve applied with 9 other lenders.  Face it, it you’ve been told no 9 times, the 10th time is going to be a no too. Stop wasting my time.

When I deny applicants, we always tell them,  “you don’t qualify right now, but if you do these certain steps you will be able to purchase a home in the future.”

These people are not serious buyers, and just waste the precious time of Real Estate Agents and Mortgage Loan Officers though out all of Minnesota, Wisconsin, and the rest of the country.

Don’t take your frustration out on the messenger.  We want to approve you, but if you are not ready today – you are not ready. We will let you know that you need to alter to get an approval in the future.  Maybe pay off some debt, improve your credit score, or come up with more down payment money.  Sometimes this may mean you don’t get the latest iPhone,  or you keep your older car while you pay down your debt.

Maybe you have had some trouble paying your bills on time in the past and have poor credit.  I’m amazed at those who want, but don’t even come close to proving to a mortgage company that you are ready.  In today’s world, easy options, and loans for everyone don’t exist. You have to prove to lenders you are ready.  This means on time payments,  a good credit scores, prove your income, and have some skin in the game (down payment).

 

Minneapolis Area Medium Home Values UP 12.4%

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Minneapolis, MN:  Metro area home prices were up 3.3% in March according to the widely watched Case-Shiller home price index.

This report confirms what what I have been saying for some time now – that home prices in the Minneapolis / St Paul area are increasing, the market is stabilizing, and that especially in the sub $200,000 price range, good houses are going fast with multiple offers above asking price just days on the market.

All real estate is local. Our increase bucks the nationwide trend.  Overall, U.S. home prices fell in March, ending the first quarter with some of the lowest levels scene since the housing crisis began in mid-2006. During the first quarter, home prices nationally reached new lows, falling 1.9 percent year-to-year.

Nationwide, average home prices are down roughly 35 percent from their peak in the second quarter of 2006.

Demand for homes has been showing some serious signs of stabilization, as low mortgage rates, low home prices, and improved job growth have pushed first time home buyers off the fence and into the housing market.

According to information from the Minneapolis Area Association of Realtors, March marked the first time since 2010 that median home prices had risen in the Twin Cities.  The Minneapolis / St Paul median home price rose 6.4 %, to $149,000. The positive news continued in April, when a shrinking supply of homes on the market helped drive the median sales price up 12.4% to $163,000. Foreclosures and short sales also made up a smaller share of sales in recent months, which helped boost prices.

Forget the national reports. In this market, everyday you wait is going to cost you. Get pre-approved today, and be in your own home next month.

Are you a pop tart agent?

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Are you a pop tart Real Estate Agent? Do you instantly jump when a new buyer calls? Stop wasting your time, set proper expectations. Is your buyer really pre-approved for a home mortgage loan? Learn more with Joe Metzler and Dave Harvey of Cambria Mortgage, and the MN Real Estate Daily Show.

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