Your Mortgage Pre-Approval may no longer Valid
If you been pre approved within the last 60 days it might be worth asking if you have had you financing approval “tuned up” with respect to the mortgage changes. With the rule changes many applicants who easily could afford a home are now being squeezed out. This is especially prevalent when the purchase had a reliance on rental income.
Here is an article regarding this issue ... Please give me a call anytime if I can provide a healthy second opinion!
Your Mortgage Pre-Approval may no longer Valid; Why many Mortgage Pre-Approvals are not Accurate
Pre-approvals are a great way for many home buyer’s to determine how much they can afford on a purchase. The pre-approval does not act as an approval, but it acts as an interest rate hold. The pre-approval is simply a rough estimate on what the borrower can be approved for. The pre-approval has remained fairly accurate for quite some time; however, with the changes in mortgage rules, many home buyer’s pre-approvals are now broken.
For many individuals applying for a pre-approval they meet the following details: they will have 5% down payment, 35 year amortization, and they will set the loan at the maximum borrowing capability. When the borrower purchases for this amount, they would expect to be approved based on their pre-approval; however, since the qualifying rate has changed many 4 year or less fixed rate or variable rate applicants may be out of luck. The reason for this is that when the mortgage qualifying rate changed, the qualifying rate almost doubled. This caused the maximum amount that a borrower could be approved for was reduced by 20% to 25%.
This means that if they make an offer based on the numbers they were provided with their mortgage pre-approval, they would be declined.
How can you protect yourself by making sure that you qualify for the house you are buying? Make sure to contact your mortgage broker, and have them review your pre-approval to make sure that it is up to date. Unfortunately, many brokers have so many clients that they could not dream of following up with them all.
To be certain that your mortgage is approved, make sure that your offer is subject to financing and give your broker at least 5 business days to confirm. This will also give you time to complete your appraisal and inspection on the property.
Here is an article regarding this issue ... Please give me a call anytime if I can provide a healthy second opinion!
Your Mortgage Pre-Approval may no longer Valid; Why many Mortgage Pre-Approvals are not Accurate
Pre-approvals are a great way for many home buyer’s to determine how much they can afford on a purchase. The pre-approval does not act as an approval, but it acts as an interest rate hold. The pre-approval is simply a rough estimate on what the borrower can be approved for. The pre-approval has remained fairly accurate for quite some time; however, with the changes in mortgage rules, many home buyer’s pre-approvals are now broken.
For many individuals applying for a pre-approval they meet the following details: they will have 5% down payment, 35 year amortization, and they will set the loan at the maximum borrowing capability. When the borrower purchases for this amount, they would expect to be approved based on their pre-approval; however, since the qualifying rate has changed many 4 year or less fixed rate or variable rate applicants may be out of luck. The reason for this is that when the mortgage qualifying rate changed, the qualifying rate almost doubled. This caused the maximum amount that a borrower could be approved for was reduced by 20% to 25%.
This means that if they make an offer based on the numbers they were provided with their mortgage pre-approval, they would be declined.
How can you protect yourself by making sure that you qualify for the house you are buying? Make sure to contact your mortgage broker, and have them review your pre-approval to make sure that it is up to date. Unfortunately, many brokers have so many clients that they could not dream of following up with them all.
To be certain that your mortgage is approved, make sure that your offer is subject to financing and give your broker at least 5 business days to confirm. This will also give you time to complete your appraisal and inspection on the property.
Did you get a fixed rate or a variable rate pre-approval? Have you had your pre-approval reassessed after the rule change