As a result of the ongoing mortgage crisis, it’s a lot more difficult to get approved for mortgage financing when purchasing a piece of property.
Gone are the days of 100% financing and no doc loans. Now you actually have to prove you make the income you say you make and put a little skin in the game.
So if you make an offer on a property, or want to, you’ll likely need to get a pre-approval first so the agent and home seller know you mean business.
Use My Guy or Gal to Get Your Loan
However, some real estate agents go a step further and ask that you get pre-approved with their “preferred lender.”
That’s right. In order to make an offer on the property in question, you’ll have to call their “loan guy” and get a pre-approval letter first.
This can be a drag, especially if you already got pre-approved elsewhere. You won’t want to go through all the motions again, not to mention get charged AGAIN for having them pull your credit.
But again, if you want to be considered, you’ll need to do it, especially if the property has interest from multiple prospective buyers.
Don’t Give Your Intentions Away
While it’s not that big of a deal to get a second pre-approval, be careful when working with their loan rep.
They may try to squeeze you for information, asking stuff like, “How much is the loan amount?” Or, “What is the purchase price?”
Obviously, they can take this information straight back to the agent after you’re done and say, “They wanted to get pre-approved for X loan amount.”
This gives the agent a key nugget of information about what you may offer for the property, even if your initial offer is lower.
That said, just tell the loan officer to give you a general pre-approval that maxes out your loan amount. Don’t provide anything more that may tip them off.
You Don’t Need to Use Them
Finally, understand that a pre-approval is just a pre-approval. In other words, you don’t necessarily need to use the lender you get pre-approved with.
If anything, you just have another quote and another person you can use against another bank or lender.
So be sure to get multiple quotes and then have them fight for your business. Believe it or not, mortgage rates and fees are VERY negotiable.
You’d be a fool to get just one quote, or simply go with the preferred lender. Shop around and you’ll save yourself some money, regardless of whether the agent tells you how “great” her guy is.
Read more: Should I buy a house or a condo?