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“The Pre-Approval Process” Will I get Approved To Buy This home?

Posted by buildsbythebay on January 29, 2020
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“The Pre-approval Process” Will I get Approved to buy this home?

What a cruel joke the Pre-approval process can be. Unless you fully understand what it means to be pre-approved verses approved dear home buyer, please read on!

All you first time buyers have that amazing glint of excitement in your eyes because you have decided the time has come to buy a home. You have  the pre-approval from your bank or mortgage lender. This is good news, but it is NOT a full approval so don’t think you can make an offer without adding that Financing Condition, especially if the home is a fixer upper.  Pre-approval simply means you are approved for up to a certain amount based on your personal financial situation.

Many times the bank will need to do an appraisal on the home/condo prior to approving your mortgage.

Let me explain by way of a simple example. ‘ You are approved for $300K and you have an accepted conditional offer of $299. The bank sends out an appraiser and the home comes back at $275K not $300K. You have two choices: to walk away based on the financing condition not being met, or somehow pay for the shortfall of $25K, not Ideal!! For more information on The Preapproval or any other stage in the Home buying process please feel free to reach out.

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