How to Become a Preferred Buyer
Sellers will always prefer a cash offer over a financed offer due to the ability to conduct a quick closing. Cash buyers do not have to wait 60-90 days for their money to close. They can close whenever the title company is ready. For the rest of us that do not have the cash, there are other ways to get noticed by Sellers and compete in the real estate market.
Here are some questions to consider when seeking financing solutions:
Should you go with the first lender you speak to?
No. More often than not, you are going to be paying for this decision for the next 15-30 years. You want to make sure you have done your due diligence on different lenders and select the one that provides you the best rate for your financial situation.
Which lender is right for me?
There are a ton of lenders out there. There are Direct Lenders such as banks,Mortgage Brokers that are able to scour the market for the best deal on your behalf, and Hard Money lenders that are able to get you financing when your other options have run short. Each comes with their own set of advantages. The right lender is the one that will provide you the best rate and get you to the closing table.
What is the difference between pre-qualification and pre-approval?
A Pre-Qualification is a letter Buyers receive after supplying your estimated financial information and commitments. This is an estimate of what you can afford. These letters are LESS reliable than a Pre-Approval.
A Pre-Approval is a letter Buyer(s) receives after a more thorough analysis of the financial information. Typically, a lender has run the debt to income figures, analyzed the financial situation in depth, and run the Buyer(s) credit.
Sellers prefer Buyers that have been PRE-APPROVED over those that have been Pre-Qualified.
Here are some external links to some great articles about this topic:
https://www.bankrate.com/mortgages/finding-the-best-mortgage-lender/
