August 19, 2022 • 31 mins
Jeff and Gina discuss the importance of getting pre-approved. We discuss what's involved in the process, from types of pre approvals to what's reviewed in the process.
Jeff Cunningham is a Realtor (license # 301547) with United Realty Group (Broker license C34827) serving the Triad NC area.
Jeff can be reached at
Email - jeff.cunninghamrealtor@gmail.com,
website, jeffcunningham.mysalecore.com,
Facebook,- https://www.facebook.com/jeffcunninghambroker/
Gina Milloway is the Mortgage Loan originator NMLS #1676070 & CEO of Triad Mortgage LLC, NMLS # 2385260,
Gina can be reached at,
Email: gmilloway@traidmortgagellc.com
Web: https://www.ginamillowayloans.com/
Facebook - https://www.facebook.com/mortgageswithgina/
Office -336-290-1891
NMLS Consumer Access: https://nmlsconsumeraccess.org/
Privacy Policy: https://www.ginamillowayloans.com/privacy-policy
Triad Mortgage is an equal housing lender
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
All right.
Hey everyone.
And welcome to the show.
Let's get moving with Jeff andGina.
I am Gina.
Millway your local mortgageadvisor, and this is.
Hey everybody.
I'm Jeff Cunningham and I amyour local real estate agent
here in Greensboro and the triadof North Carolina.
So today we are gonna be talkingabout a very important first
(00:23):
step to buying a home.
So if you've made that decision,you're ready to pull the trigger
and you're going to be buying ahome, purchasing a home in the
near future.
Why do you need to getpre-qualified?
Why is that so important?
Um, it's the biggest question Iget asked all the time.
I don't understand why can't wego look at that house, so,
(00:45):
right, exactly.
So from your perspective, Jeff,as a real estate agent, when you
get somebody who calls you upand says, Hey, I really wanna go
look at this house.
It just hit the market.
Your first question is, did you.
did you get yourself?
Prequalified?
Did you get prequalified now?
Why is that in today's marketspecifically?
(01:06):
Perfect.
Perfect question.
Um, to in today's market, as weall know, uh, we are in what
they call a seller's market.
Yes.
And a seller's market isbasically driven hard by the
sellers and in most situations,Um, the seller is in the
driver's seat.
Um, and again, with today'smarket, our prices are
(01:29):
inflating.
Um, inflation is inflating.
Um, things are just going up invalue, um, as, as, as we sit.
Um, so, um, the speed of themarket, I speed if, if, if
you're just getting into it aswell, uh, is, is at a very, very
high rate.
Um, we are having multipleoffers.
We are having very small amountsof time to actually go in, take
(01:52):
a look at the home and say,validate whether or not that is
the home that we are looking forto purchase.
Um, the decision making time ismuch smaller than it has been.
So in the, where we have been inthe past, Hey, I wanna take a
look at the house.
Let's go take a look, go callthe bank when we're done.
(02:12):
See if you can afford it.
And then we go from there.
In today's market.
We don't have that time.
We don't have that luxury.
Right.
So speed.
We have to.
Yep.
So in order to get the speedtaken care of, we need to get it
taken care of upfront, right?
Absolut.
It's just part of thepreparation.
Absolutely.
Cause it, it is things aremoving really quickly and we
don't have the time to go lookat a house and then, then come
(02:35):
back to your loan officer andthen go through the preapproval
process.
And granted we're, we're prettyfast, but we know a lot of times
that the home looking experiencehappens on the weekend and.
Granted, we typically answer thephone and, and do occasionally
work on the weekend.
Um, it may not move as fast aswe need to on the weekend.
Um, not everything's open to usthat may need to be open to us.
(02:56):
So, um, mm-hmm so it's reallyimportant for speed right now in
today's market to go ahead andget that preapproval letter
first, before you start lookingat homes and falling in love
with one that's, you know, gonnabe off the market.
Uh, relatively quickly.
Absolutely.
And you'll you, you know, if youcan set your expectations up
front, um, as we are speaking ofhere with your pre-qualification
(03:18):
letter, of course you are given,say a low and a high, uh, dollar
amount for what you can afford.
And that's where, you know,again, that's where that's,
what's gonna be driving yoursay, selection process.
Mm-hmm um, on top of.
Just the aesthetics, you know,whether you like it as well as
school systems, you know, is itkid friendly?
Is it, uh, you know, adult petfriendly, yada yada yada.
(03:40):
Right, exactly.
So the pre-approval processreally sets the tone for the
home, buying the home shoppingexperience, as far as what you
can do for them, the houses thatyou're gonna show them, um, the
payment, what they can afford,et cetera.
So we.
If we really wanna make surethat that person is truly
qualified.
If they're looking, um, at ahome a$300,000 home, we wanna
(04:01):
make sure that they really can'tafford that$300,000 home mm-hmm
so that way you guys aren't soto speak, wasting time driving
around homes and aren't gonnawork, um, correct.
Maybe they can afford more homethan what they thought they
could afford.
So, you know, that goes bothways.
It's to make sure that we'reputting you in the right home.
Mm-hmm, make sure that theincome is right, because we
(04:22):
calculate income different than.
You know, an individual mightsay that their income is so we
wanna make sure that we're inthe ballpark, right.
We're in the ballpark.
Absolutely.
You know what we're looking atwhen we start going out and
looking.
So, um, so that's, that's thebiggest thing.
So right now is speed.
Speed is necessary.
You wanna make sure you'repreapproved before you even.
(04:43):
Get out there on the road orstart looking at those homes.
So, so true.
Very, very true statement.
And again, this is part ofsetting your expectations in,
in, in your home hunting or yourhome buying experience.
Um, and again, it's it.
You follow you just gotta followthe dots on this one.
Yes.
Um, if you are not preapprovedfor, let's just say more, uh,
(05:05):
than what you're offer.
Um, then again, your, your, yourexpectations are gonna gonna
fall short, right?
Absolutely.
And then that's just gonna breakyour heart, right.
And one, you have to think theseller.
sellers right now.
It's my understanding.
You can correct me if I'm wrong,Jeff, but sellers are not really
considering offers that come inwithout a pre-approval correct.
If you don't have thatpre-approval letter, your offer
(05:26):
is not gonna be put to the topof that because they can't
verify it.
There's no way that they canpossibly know that you can
afford that home unless you'repaying it unless you're a cash
buyer and we're not speaking tothose buyers right now.
If you're a cash buyer, that's alittle different story, but
you've got to have that letter,that preapproval letter to go
with your offer to make youroffer competi.
absolutely.
(05:46):
And, and, and even though youmentioned the cash buyers to tie
this all together here, youknow, so we're out during the
weekends, looking at houses, uh,whether or not you're a cash
buyer or, uh, uh, uh, someonejust U looking for a loan or, or
to use some lending, um, youstill need to have proof of
funds.
Mm-hmm even as a, even as a, acash offer.
Right.
And, and like you're sayingpart, part of the pre-work that
(06:09):
the buyers need to do is to makesure that they do have this
information, cuz again, speed tothe market.
House just comes on on sayFriday evening, you look at it
Saturday morning.
Okay.
Hey, I gotta, I gotta get anoffer and I gotta call a bank
and see if they can go ahead andgive me some proof of funds
documentation.
As you said, Saturday's banksaren't open.
Um, so, uh, again, part of thepre-work that we need to do to
(06:33):
be successful.
As a realtor and as a purchaser,as a client, um, you know, we
just need to make sure thatthese, uh, um, these
prerequisites are done.
That's right.
And, you know, I think that it'sfair to say, that you just don't
wake up Saturday morning and go,I'm buying a house.
Right.
you've been thinking about this.
So come on guys.
(06:54):
Work with us here.
Like you've been thinking aboutthis.
You, you may have just startedthinking about it within the
last few weeks, but this issomething that has crossed your
mind.
This just didn't happen.
Mm-hmm you just didn't wake upSaturday morning and a house
popped on Zillow and you're likethat.
I gotta buy this house.
Mm-hmm that's not typical, maybeoccasionally, but that's not
typical.
You you've been thinking aboutit and wanting to do something
(07:15):
and.
Use that planning to youradvantage.
Get ahead of it.
Go ahead and get your preapproval done.
Totally agree with that.
And, and, and, you know, and as,as we typically do, um, to get
in touch with us, please use thecontact information below, uh,
it'll be, uh, down below in thelink, um, and just get in touch
with us, uh, as soon as you areready to.
(07:38):
Get that preapproval processstarted.
You do find a home that you'reinterested in.
Mm-hmm you know, just use thecontact information below to get
that information started aswell.
Yeah, absolutely.
So let's kind of review thedifferent types of letters that
you can get the different typeof qualifications and what they
mean, cuz they, there are somedifferent ones out there.
Now I will preface this bysaying some states are
(08:01):
different.
Um, I'm I'm specifically, uh,I'm licensed right now.
My primary work.
In North Carolina, but I do havea couple other states, um,
Virginia and Georgia.
So this will vary a little bitstate by state, but for us, um,
in this area, there are reallythree types.
And the first type is what'scalled a pre-qualification
(08:22):
letter.
This letter's worth about whatit's written on.
So this is, yes, this is metalking to the borrower and
going, Hey, what's your creditscore?
Great.
What, what's your income?
Great.
What, what debts do you have?
Great.
Well, based on this scenario, itlooks like it may be possible
for you to buy.
(08:44):
That's essentially aprequalification letter.
I'm not verifying the income.
I'm not looking at document.
I'm not going behind you andmaking sure that what you tell
me is correct.
It's just a conversation.
And so just, and then that's allit is, is a conversation.
And, and you're not required asa lender to put any extra
information in there other thanwhat's what it's calling for.
(09:07):
Right.
Right.
Exactly.
And so.
You know, those, thepre-qualification loaders are
not gonna be as competitive,especially right now in today's
market.
Um, I mean, I still see themoccasionally.
A lot of times people will goonline and do them, and yes,
they are pulling your creditwhen you go online, but they're
not verifying other documentssuch as income.
(09:27):
They're not re actuallyreviewing the credit report.
They're not reviewing the bankstatements.
So that's still reallyconsidered a pre-qualification
letter.
Mm-hmm mm-hmm so.
the next step is a more indepth.
Look at your overall profile andthat's gonna be the preapproval
letter mm-hmm So the preapprovalletter is I would say that's
(09:48):
what we see most in this area.
Um, when people are buying is,is the preapproval letter.
So for me, what I do, when I getsomeone who needs to be
preapproved, I'm pulling theircredit in, I'm reviewing the
credit to see what's on there tomake sure, you know, late
payments, collections, etcetera.
(10:08):
I'm also collecting incomedocuments, making sure that the
income is correctly calculated.
What type of income do theyhave?
I'm pulling bank statements tosee, you know, what's on their
bank statement.
Do they have an extra bill thatthey're not reporting?
That's gonna come up during theprocess?
Um, for instance, surprise anapartment that they're renting
in another town because theywork out of town.
(10:29):
I've had that happen.
So it's an in depth.
Look at your documentation withyour credit report.
To make sure that you arequalified and in an experienced
loan officer can take thesedocuments and really look at
them almost in the same manner,actually in the same manner that
an underwriter will look atthem.
So that's pretty the most, themost common letter that we see
(10:52):
in this area is the preapprovalletter.
So you wanna make sure thatwe're at least doing that.
That's, that's the minimum.
If you're gonna be shopping andhaving, you know, a competitive
offer, when you say Joe, Yes.
Oh, absolutely.
And, and, and, and that's halfof, uh, well, more than half the
battle, uh, just as you werementioning, um, you know, we, we
see, we see proof preapprovalletters everywhere.
(11:15):
I mean, like you're saying, it'salmost, you can just pull it off
a, a serial box.
Um, it's, it's, they're justvery common.
They are very generic, as yousay, and very broad.
Um, and then yes, to get moreinto the specifics and have a.
Fine pinpoint idea of what it isthat you can afford.
Totally agree with you.
(11:35):
We need to get this pre, uh,approval letter.
I'm sorry, prequalifiedprequalification letter out.
So we can go ahead again, makesure that we do have all the
information that we do, uh, thatwe're asking for.
Yeah.
So we want that pre thepreapproval letter is gonna be
the in depth.
Fine.
One of the pre-call is gonna beour generic one.
Absolutely.
So, and then, geez, I get thoseback well, you know, it's funny
(11:58):
because people do use theminterchangeable.
Um, mm-hmm and honestly, youknow, some people may not know
the difference, but there, thereis a difference on what's out
there.
And I would say that.
The buyer really wants toprotect themselves and not do
that.
Pre-qualification letter mm-hmmbecause so many things can be
overlooked and apre-qualification letter because
(12:19):
nothing's being looked atnothing's being checked, nobody
going behind you.
Exactly.
And verifying that, what you sayis accurate.
Right?
So, and real life scenario I'vehad, I've had an offer.
We again, on a weekend spent asat.
It was a Saturday afternoon,about four o'clock in the, a.
And met, uh, an individual and,and asked if she had her
(12:39):
pre-qualification letter.
Absolutely does.
So we go down, um, the, we hadto do this old school.
She's a bit of an older woman,um, did not have all the
technology on her phone that werequire, or yeah.
For any of the, um, e-sign andso forth regardless, um, asked
her if she did have herpre-qualification letter.
And of course she pulled it outin paper and it was from one of
(13:02):
our larger.
And the problem with thepre-qualification letters as we
were just stating they are justso generic and basic, they'll
give us a number mm-hmm as faras the, the conversation that
had been had, and it'll simplystate out there, these
individuals are qualified up tothis dollar amount.
(13:23):
and with these larger banks,unfortunately in a
pre-qualification letter,sometimes you can't contact
anybody.
That's very true.
Yeah.
Yeah.
So on the weekends, when wecan't contact anybody, just like
we mentioned a few minutes ago,um, we're, we're dead in the
water, right.
Um, or.
You might get into a goodposition.
This is where we talk about ourfiduciary responsibilities with
(13:43):
our clients.
You might be in a great positionto have an offer put in.
Okay.
Maybe you're the first one.
Maybe you're only the first of10 or second of 10, which is
great earlier the better.
Right.
But at the same time, typicallythat's associated with or
accompanied with a due diligencecheck.
My, if you were to submit yourdue diligence check with your
(14:04):
pre-qualification letter, andthen when you went to get
preapproved and you didn't thennine times outta 10 and even
nine and a half times outta 10,that due diligence money is.
It's forfeited.
Yeah.
And, and, and again, a goodrealtor will spot this.
A good lender will spot this foryou, but at the same time, we
(14:29):
wanna make sure that you're notgetting yourself into these
positions, um, that are gonnaaffect you negatively.
Right.
Which is why we go ahead andcall this pre-work right.
Exactly.
Now there is one more letterthat you will see.
You're not gonna see this asoften because it does.
A lot more work on the lenderside.
(14:49):
And so that is the, thecommitment letter, a bank
commitment letter.
And this is essentially iswhere.
The file has all the documentshave been collected.
Uh, we review it just as wewould the preapproval, but then
we upload it.
Um, and have an underwriter,take a look, actually take a
look at the file.
Now it's really nice to havethese because you know what the
(15:10):
conditions you know are, andthey're laid out, you know, and
the paper, you can just startchecking'em off and get it done
and put you a step ahead of theprocess.
The con is, is that it is quitea bit of extra work to, to go
through this.
And like I said earlier, a goodloan officer, who's just doing
this and knows what to look outfor.
Doesn't need to have this done.
(15:30):
Can competent, you know, canissue that preapproval letter
with a lot of confidence, butthe commitment letter is
underwritten.
It does go through anunderwriter's check mark.
So.
The downside to it again is thetime that it takes to get these.
And everybody's a littledifferent out there.
Lenders are different as far astheir turnaround time, but
(15:53):
basically the overall.
Deal with commitment letters andwhy you don't see'em as often is
because of the, that time andthat commitment.
So you, our back office, ourprocessors are underwriters.
A lot of times they're paid onproduction based on how many
files they get through how manyclothes, you know, almost
commission.
And so if you have a file that'scoming through that, doesn't
(16:14):
have a property attached to itand may or may not ever have a
property attached to it.
It's kind of free work for them.
So to speak.
And I'm just letting you guys ona little, little trade secret
there on what goes on in thebackside, but it, you know, it
is what it is.
We're all, you know, we're allhere, um, you know, to earn a
living.
So I don't think there'sanything wrong with, you know,
kind of revealing that so thateverybody knows what, why you
(16:37):
don't see these as often, but alot of companies are, are
getting better at em.
Um, during the pandemic, it washarder to get'em because we were
just overwhelmed with, withThere was no room in the, in.
During the pandemic and thepipeline to do these free, these
free B, so to speak.
So.
But we, we can do'em more now.
And, um, I do do them on fileswhere maybe it's a little
(16:59):
questionable, you know, there'ssome things going on.
Maybe there's a rough patch inthe credit.
And I wanna, I just wanna havethat extra security behind me,
but it is a nice letter to have,because it, it is a one step
ahead.
Like you've already gone throughthe underwriting process.
So now it needs the house, youknow, so we have our conditions,
let's get the house and let'smove forward.
So it'll speed up the process alittle bit as.
(17:22):
but it takes a little morepreparation than the other two
letters do.
So.
Absolutely.
Absolutely.
Well, a couple, couple questionson that.
Uh, if you got just a second.
Yeah.
Um, so coming with thecommitment letter, you had
mentioned that, uh, that goesthrough, or that is typically a,
a loan or the portion of theloan that is, uh, going through
underwriting mm-hmm okay.
(17:44):
Um, can you tell me what anunderwriter or underwriting is?
Yeah, so the underwriter isessentially the gatekeeper to
the loan process.
mm-hmm so we it's a love, haterelationship, everybody you love
it when he goes well, and youhate him when it doesn't but
essentially the underwriter isgoing to be someone who is
(18:05):
specifically trained in the loanproduct that you're doing.
And a lot of times loan productswill have.
Different requirements anddifferent underwriters that look
at files, but the underwriter isthe person who's the gatekeeper
to the file they look throughand they go behind me and make
sure that, yes, this was done.
Yes, this was done.
Yes.
This meets this credential.
They, they check it off and theymake sure that, yes, this file
(18:27):
does work.
And then they use their magicand they do a bunch of other
checking behind that to see ifthere's any judgements, any
liens, anything else going onwith this person?
It may not have come up in theinitial, you know, preapproval
process.
Right.
So what it sounds like isbasically, um, judge and jury
they're they're the final say?
Yeah, absolutely.
On, on whether or not you goforward with the home.
(18:49):
They're they're they're like the99 point.
9% of the final say there areoccasions, you know,
underwriters are people too.
So there are occasions wheremaybe they misunderstand a
guideline or you have to push itup to, to management and a good
loan officer.
Won't be afraid to do that.
I'm certainly always willing togo to battle with an
underwriter.
(19:10):
No, I'm right.
I know I'm right on this.
So, you know, we've, we've allhad those battles and, and, you
know, it feels good when we win,but yes, the underwriter is
definitely.
Judge and jury almost.
A hundred percent.
Mm-hmm yeah.
Perfect.
Perfect.
Well, and, and the reason I askthat, um, and, and thank you for
(19:30):
the clarity on that, but thereason I ask that is, you know,
we still need, um, uh, theassurance that again, the
process is gonna be completed.
Yeah.
Um, so, so the security, asyou're saying with the, you
know, underwriting and orcommitment letter, even though
it may take a little bit more.
certainly gives you a better,um, more security.
(19:51):
Yes.
Um, in, in, in your purchasepower mm-hmm absolutely.
Okay.
And I do know that there aresome, some loan programs or
products that are out therenowadays, um, that are
highlighting the fact that thesefolks or, or, or they're, uh,
loan will be processed up until.
Say an underwriting process, um,or point, and then from there,
(20:11):
you know, you're just waiting tofind the right house.
Right.
Exactly.
Is that that about right?
Mm-hmm yeah, exactly.
Okay.
Wonderful.
Wonderful.
So in that again, is the purposeof getting these preapprovals or
at least having a preapprovalupfront mm-hmm um, again,
pre-approval.
Not necessarily the pre-qual,but the pre-approval and
commitment letter that comesthrough underwriting are, are,
(20:33):
are certainly the better lettersto have.
Uh, rather than again, the firstone we had mentioned, which is
just pre yeah, absolutely.
And it, and it's all about theconsumer's protection, you know,
mm-hmm if, if you're buying ahome and you're putting down
five, 5,000 in due diligence,you don't wanna risk that money.
You wanna do it with confidence.
You wanna know, I don't care howmuch money you have in the bank.
(20:53):
Nobody wants to just give.
five grand.
No, you know, on a whim.
I mean, that's, mm-hmm, that'snot smart.
So having, having the confidenceand feeling assured that when
you make that offer and youwrite that due diligence check,
that that your offer is prettysolid, that you have a really
mm-hmm good chance of thishappening.
Uh mm-hmm that it just gives youconfidence and it, and it makes
(21:14):
the whole process a lotsmoother.
Great.
Totally agree with you.
I wish all of my buyers wouldhave some sort of commitment
letter, um, at least apreapproval letter in their, in
their pocket.
Um, you know, again forsecurity's sake, I, I, as well
as you know, that these folksare dealing with real money,
real savings, and by puttingthat information, putting that
(21:36):
money up front based oninformation that they're
receiving.
From a lender and, or a realtoror both, you know, uh, they,
they, they're putting somesignificant trust in and, um,
and some financialresponsibility on our show.
Yeah, absolutely.
Um, and, and that's somethingthat, again, um, Jean, I know
we've talked about this before,but we both take very, very
seriously, um, you know, again,as our fiduciary
(21:56):
responsibilities back to ourclients.
So we wanna make sure that, uh,again, the request that we make
of them to be prequalified.
Preapproved and again,underwritten, um, it's not just
to run them through the ringer.
No, absolutely.
It's actually go ahead and getthem going.
No, it it's, it's a protectionit's protection for the client.
It's a protection for me, youknow, to make sure that I'm, I'm
(22:19):
doing, like you said, my, my duediligence, it's a protection for
you.
Yeah.
To make sure that, um, thatyou're not putting the buyers in
a difficult position, it's allabout protecting them.
And it's a very, very importantpart of the process.
Now.
Mm-hmm Let's talk about anotherside to this that, uh, people
don't talk about.
And that is what happens whenthe buyer decides to do some
(22:45):
stuff with their credit afterthey've been preapproved.
And I think this is really,really important.
So you guys getting ready to buya house?
Listen, if you've beenpreapproved based on X and then
you go out and you buy a.
or you buy some new furniturebecause you're getting ready to
(23:07):
buy a new house and you put iton our rooms to go credit card.
I have had, I I've had thishappen.
Mm-hmm you change your profile.
Yep.
You and some people, it may notaffect them at all.
It may be a very, very smallpercentage of their, their
income.
So it really doesn't change it.
But the other side to that is itmay change that greatly.
(23:30):
It it's all a percentage.
And you need to know before yougo into this, will buying this
car or will getting.
Credit card affect my ability topurchase the house that I want.
You may have to go from thedream house to like selling for
the okay house.
If you do that.
Mm-hmm Yeah, yeah, absolutely.
(23:50):
And yes, that has happened onnumerous occasions.
I know you see it more oftenthan I do.
Um, it's common, but yes, it'salmost common.
It, it, that it, we talk aboutit and people joke about it and
it does happen.
It happens all the time's.
And let me tell you.
if you've ever gotten a newcredit card, do you know?
Cuz then we have to startdocumenting.
(24:12):
Then the documentation processcomes in.
I have to know.
Okay.
Yes.
Let's say it doesn't affect yourability to buy.
I still have to document itbecause that new credit card is
not on your credit report yet.
Mm-hmm it takes a little bit forthat to happen.
Have you ever tried to go get acredit card statement from a new
credit card?
(24:33):
It's not easy.
No, no, it's not easy at all.
No.
So, so what's the best advicedon't do it.
well, fantastic.
The best advice don't do itunless it's an absolute
emergency.
I mean, there, it, it canhappen, but you need to know
that you're gonna be doing somework to get the documentation
(24:55):
that you'll have to provide.
If you open a new line of creditnow.
There are different lines ofcredit.
So they're not all as difficult,but credit cards, especially
furniture cards can be, can bedifficult to get that
documentation that we need, evenif it doesn't affect their
buying power.
So just be really careful on it.
If you've been preapproved basedon this set of credentials, this
(25:18):
this file.
Mm-hmm if you don't have to,don't open up new ones until
after you've closed and, andyou're done with the house.
Wait, because, oh yes.
You know, if you are.
You know, if we're three daysfrom closing and they do final
checks because they do finalchecks and this, they do final
checks.
Yeah.
And this pops up, we're probablynot closing in three days.
(25:41):
Right?
Right.
Your closing's now delayed.
Hopefully the buyer, you havethe grace period at the end of
your contract.
And now the seller doesn't backout because all of a sudden, we
can't close on time when we'resupposed to close.
And that does happen.
It at absolutely 100%.
Does happen.
So mm-hmm, the take home advicehere is talk to your loan
(26:02):
officer.
If you've already gone throughand been preapproved, or let's
say you just, you just opened itwhen you talked to them, let
them know because it takessometimes 30 to 90 days to, for
that, um, for that debt to showup on the credit.
Sure.
So if it's not there, we don'talways know about it until it's
(26:25):
until that 30 or 90 days.
So just, you just gotta be openand honest and talk to your loan
officer.
We're here to help you.
Yes, I totally agree.
And that's, uh, that, that's,that's a great statement is yes.
Please be open and honest withboth your realtor and your loan
officer.
Again, reason being, you know,we, we, we, we.
(26:46):
You're loan officer in yourrealtor.
We both have a, a, a similarresponsibility, um, which is
again, getting you into thathouse.
And if I'm not getting theinformation over to her, she's
not getting the information overto me.
Uh, you know, again, there's,there can be a simple miss and.
And again, what what's at riskis, is some significant
financials.
(27:06):
Yeah, absolutely.
Again, whether, whether or notyou're into your due diligence
period, if you've gone beyonddue diligence and you're now,
um, what a lot of folks call onyour escrow.
Um, but around here we call thatearnest money.
And again, you've, you've gotsome significant discounts.
I'm sorry.
You get some significantdeposits that arrive been made
and, you know, by going out andbuying a$700.
(27:29):
So.
You know, you could really messyourself up and, and again, that
could be a, you know, realdisaster for buying your house
on time.
Yep.
And, and also putting it injeopardy where you might only be
able to close.
Yep, absolutely.
Yeah.
So good point.
So yeah, just, just be open andhonest with you.
You know, people tend to benervous about talking to the
(27:52):
loan officer about digging intotheir financials.
Mm-hmm especially for some home.
Mm-hmm it's a big deal to buy ahome, you know, and if you've
been saving up and gettingready, it could be, it could be
nerve wracking to actually havethat conversation, but we're
here, we're here to help.
We're here to get you throughthe process.
Mm-hmm you know, I always jokearound a little bit that going
(28:16):
through the preapproval processis kind of like me coming over
to your house and unannouncedand opening up your underwear
drawer and just going throughit.
Right.
Yep.
Whatever I find is what I find.
But, but my job is yes.
I find I may find something, buthow do we work it into the
(28:38):
scenario and how do we get pastit if I do find it right.
And that's my job, my job is toadvise you on how to move past
any issues that there may be.
If we can't, now, there may besome issues we can't move past
right now.
but you need to know that beforeyou drop 5k and due diligence
and lose it.
Absolutely.
(28:58):
You need that 5k and duediligence for six months or a
year from now when you can buy.
Right.
Right.
So don't be afraid to talk tous.
There.
There is nothing we haven'tseen.
Like right.
We're kinda like a financialdoctor.
We have seen it all.
We have heard it all.
You are not gonna shock andsurprise us.
Mm-hmm no, no, no.
Ma'am we are, we are, we haveseen enough yes.
(29:20):
Well, what we need to do and,and again, we just need to make
sure that folks understand thatthis is pre-work it's yes.
It's not necessarily homework.
Okay.
It's pre-work because these arethe things that we wanna see up
front and.
Protect you financially.
Yes, absolutely.
So do talk to your loan officer,do get preapproved.
Don't open new accounts.
(29:41):
right.
Don't hide stuff from us for thelove of God, please don't hide
stuff.
So those are the big takeawayshere.
So we, we are absolutely here tohelp you.
And if you guys have anyquestions whatsoever about
getting started in the process,we're gonna have all of our
contact information listedbelow.
For you to reach out to us andanswer any questions that you
(30:02):
might have.
Jeff is North Carolina area, um,specifically Greensboro triad,
and I'm currently licensed inNorth Carolina, Georgia, and
Virginia.
So I'm happy to help him throughthose areas.
Fantastic.
Fantastic.
Yes.
So folks, if you have not yet,and you are interested.
In the home buying process,please reach out, um, and, and,
(30:25):
and get started on, you know, ifanything, the pre-qual
information then move up intothe preapproval information, uh,
a preapproval step.
And, and then if we can keepmoving it to the commitment
letter, um, and the underwritingstatus, and that would be again,
Uh, the best place that youcould be once you get into, you
know, uh, a realtor's car, um,or if you're out there looking
for new homes now.
(30:45):
Absolutely.
Well, I think we have just aboutcovered all, any last minute
details that we need to wrap upor no, I don't think so.
At this point, other than, youknow, again, the market is still
cruising at a, at a great rate.
Um, rapid rate, I should say.
Homes are still moving.
Uh, equity is still growing.
So we need to go ahead and makesure that you folks are in the
(31:06):
right position to get that housewhen you're ready to get that
house.
Absolutely.
So we'll see you guys, hopefullyin about a week, we are gonna
come on and talk about gettingstarted with your real estate
agent, what you need to knowabout picking an agent and why
it's important to commit to thatagent.
So thank absolutely.
Yeah, absolutely.
Thank you guys for hanging inthere and we'll see you next
show.
(31:27):
See you next time.
All right.
Hey everyone.
And welcome to the show.
Let's get moving with Jeff andGina.
I am Gina.
Millway your local mortgageadvisor, and this is.
Hey everybody.
I'm Jeff Cunningham and I amyour local real estate agent
here in Greensboro and the triadof North Carolina.
So today we are gonna be talkingabout a very important first
(00:23):
step to buying a home.
So if you've made that decision,you're ready to pull the trigger
and you're going to be buying ahome, purchasing a home in the
near future.
Why do you need to getpre-qualified?
Why is that so important?
Um, it's the biggest question Iget asked all the time.
I don't understand why can't wego look at that house, so,
(00:45):
right, exactly.
So from your perspective, Jeff,as a real estate agent, when you
get somebody who calls you upand says, Hey, I really wanna go
look at this house.
It just hit the market.
Your first question is, did you.
did you get yourself?
Prequalified?
Did you get prequalified now?
Why is that in today's marketspecifically?
(01:06):
Perfect.
Perfect question.
Um, to in today's market, as weall know, uh, we are in what
they call a seller's market.
Yes.
And a seller's market isbasically driven hard by the
sellers and in most situations,Um, the seller is in the
driver's seat.
Um, and again, with today'smarket, our prices are
(01:29):
inflating.
Um, inflation is inflating.
Um, things are just going up invalue, um, as, as, as we sit.
Um, so, um, the speed of themarket, I speed if, if, if
you're just getting into it aswell, uh, is, is at a very, very
high rate.
Um, we are having multipleoffers.
We are having very small amountsof time to actually go in, take
(01:52):
a look at the home and say,validate whether or not that is
the home that we are looking forto purchase.
Um, the decision making time ismuch smaller than it has been.
So in the, where we have been inthe past, Hey, I wanna take a
look at the house.
Let's go take a look, go callthe bank when we're done.
(02:12):
See if you can afford it.
And then we go from there.
In today's market.
We don't have that time.
We don't have that luxury.
Right.
So speed.
We have to.
Yep.
So in order to get the speedtaken care of, we need to get it
taken care of upfront, right?
Absolut.
It's just part of thepreparation.
Absolutely.
Cause it, it is things aremoving really quickly and we
don't have the time to go lookat a house and then, then come
(02:35):
back to your loan officer andthen go through the preapproval
process.
And granted we're, we're prettyfast, but we know a lot of times
that the home looking experiencehappens on the weekend and.
Granted, we typically answer thephone and, and do occasionally
work on the weekend.
Um, it may not move as fast aswe need to on the weekend.
Um, not everything's open to usthat may need to be open to us.
(02:56):
So, um, mm-hmm so it's reallyimportant for speed right now in
today's market to go ahead andget that preapproval letter
first, before you start lookingat homes and falling in love
with one that's, you know, gonnabe off the market.
Uh, relatively quickly.
Absolutely.
And you'll you, you know, if youcan set your expectations up
front, um, as we are speaking ofhere with your pre-qualification
(03:18):
letter, of course you are given,say a low and a high, uh, dollar
amount for what you can afford.
And that's where, you know,again, that's where that's,
what's gonna be driving yoursay, selection process.
Mm-hmm um, on top of.
Just the aesthetics, you know,whether you like it as well as
school systems, you know, is itkid friendly?
Is it, uh, you know, adult petfriendly, yada yada yada.
(03:40):
Right, exactly.
So the pre-approval processreally sets the tone for the
home, buying the home shoppingexperience, as far as what you
can do for them, the houses thatyou're gonna show them, um, the
payment, what they can afford,et cetera.
So we.
If we really wanna make surethat that person is truly
qualified.
If they're looking, um, at ahome a$300,000 home, we wanna
(04:01):
make sure that they really can'tafford that$300,000 home mm-hmm
so that way you guys aren't soto speak, wasting time driving
around homes and aren't gonnawork, um, correct.
Maybe they can afford more homethan what they thought they
could afford.
So, you know, that goes bothways.
It's to make sure that we'reputting you in the right home.
Mm-hmm, make sure that theincome is right, because we
(04:22):
calculate income different than.
You know, an individual mightsay that their income is so we
wanna make sure that we're inthe ballpark, right.
We're in the ballpark.
Absolutely.
You know what we're looking atwhen we start going out and
looking.
So, um, so that's, that's thebiggest thing.
So right now is speed.
Speed is necessary.
You wanna make sure you'repreapproved before you even.
(04:43):
Get out there on the road orstart looking at those homes.
So, so true.
Very, very true statement.
And again, this is part ofsetting your expectations in,
in, in your home hunting or yourhome buying experience.
Um, and again, it's it.
You follow you just gotta followthe dots on this one.
Yes.
Um, if you are not preapprovedfor, let's just say more, uh,
(05:05):
than what you're offer.
Um, then again, your, your, yourexpectations are gonna gonna
fall short, right?
Absolutely.
And then that's just gonna breakyour heart, right.
And one, you have to think theseller.
sellers right now.
It's my understanding.
You can correct me if I'm wrong,Jeff, but sellers are not really
considering offers that come inwithout a pre-approval correct.
If you don't have thatpre-approval letter, your offer
(05:26):
is not gonna be put to the topof that because they can't
verify it.
There's no way that they canpossibly know that you can
afford that home unless you'repaying it unless you're a cash
buyer and we're not speaking tothose buyers right now.
If you're a cash buyer, that's alittle different story, but
you've got to have that letter,that preapproval letter to go
with your offer to make youroffer competi.
absolutely.
(05:46):
And, and, and even though youmentioned the cash buyers to tie
this all together here, youknow, so we're out during the
weekends, looking at houses, uh,whether or not you're a cash
buyer or, uh, uh, uh, someonejust U looking for a loan or, or
to use some lending, um, youstill need to have proof of
funds.
Mm-hmm even as a, even as a, acash offer.
Right.
And, and like you're sayingpart, part of the pre-work that
(06:09):
the buyers need to do is to makesure that they do have this
information, cuz again, speed tothe market.
House just comes on on sayFriday evening, you look at it
Saturday morning.
Okay.
Hey, I gotta, I gotta get anoffer and I gotta call a bank
and see if they can go ahead andgive me some proof of funds
documentation.
As you said, Saturday's banksaren't open.
Um, so, uh, again, part of thepre-work that we need to do to
(06:33):
be successful.
As a realtor and as a purchaser,as a client, um, you know, we
just need to make sure thatthese, uh, um, these
prerequisites are done.
That's right.
And, you know, I think that it'sfair to say, that you just don't
wake up Saturday morning and go,I'm buying a house.
Right.
you've been thinking about this.
So come on guys.
(06:54):
Work with us here.
Like you've been thinking aboutthis.
You, you may have just startedthinking about it within the
last few weeks, but this issomething that has crossed your
mind.
This just didn't happen.
Mm-hmm you just didn't wake upSaturday morning and a house
popped on Zillow and you're likethat.
I gotta buy this house.
Mm-hmm that's not typical, maybeoccasionally, but that's not
typical.
You you've been thinking aboutit and wanting to do something
(07:15):
and.
Use that planning to youradvantage.
Get ahead of it.
Go ahead and get your preapproval done.
Totally agree with that.
And, and, and, you know, and as,as we typically do, um, to get
in touch with us, please use thecontact information below, uh,
it'll be, uh, down below in thelink, um, and just get in touch
with us, uh, as soon as you areready to.
(07:38):
Get that preapproval processstarted.
You do find a home that you'reinterested in.
Mm-hmm you know, just use thecontact information below to get
that information started aswell.
Yeah, absolutely.
So let's kind of review thedifferent types of letters that
you can get the different typeof qualifications and what they
mean, cuz they, there are somedifferent ones out there.
Now I will preface this bysaying some states are
(08:01):
different.
Um, I'm I'm specifically, uh,I'm licensed right now.
My primary work.
In North Carolina, but I do havea couple other states, um,
Virginia and Georgia.
So this will vary a little bitstate by state, but for us, um,
in this area, there are reallythree types.
And the first type is what'scalled a pre-qualification
(08:22):
letter.
This letter's worth about whatit's written on.
So this is, yes, this is metalking to the borrower and
going, Hey, what's your creditscore?
Great.
What, what's your income?
Great.
What, what debts do you have?
Great.
Well, based on this scenario, itlooks like it may be possible
for you to buy.
(08:44):
That's essentially aprequalification letter.
I'm not verifying the income.
I'm not looking at document.
I'm not going behind you andmaking sure that what you tell
me is correct.
It's just a conversation.
And so just, and then that's allit is, is a conversation.
And, and you're not required asa lender to put any extra
information in there other thanwhat's what it's calling for.
(09:07):
Right.
Right.
Exactly.
And so.
You know, those, thepre-qualification loaders are
not gonna be as competitive,especially right now in today's
market.
Um, I mean, I still see themoccasionally.
A lot of times people will goonline and do them, and yes,
they are pulling your creditwhen you go online, but they're
not verifying other documentssuch as income.
(09:27):
They're not re actuallyreviewing the credit report.
They're not reviewing the bankstatements.
So that's still reallyconsidered a pre-qualification
letter.
Mm-hmm mm-hmm so.
the next step is a more indepth.
Look at your overall profile andthat's gonna be the preapproval
letter mm-hmm So the preapprovalletter is I would say that's
(09:48):
what we see most in this area.
Um, when people are buying is,is the preapproval letter.
So for me, what I do, when I getsomeone who needs to be
preapproved, I'm pulling theircredit in, I'm reviewing the
credit to see what's on there tomake sure, you know, late
payments, collections, etcetera.
(10:08):
I'm also collecting incomedocuments, making sure that the
income is correctly calculated.
What type of income do theyhave?
I'm pulling bank statements tosee, you know, what's on their
bank statement.
Do they have an extra bill thatthey're not reporting?
That's gonna come up during theprocess?
Um, for instance, surprise anapartment that they're renting
in another town because theywork out of town.
(10:29):
I've had that happen.
So it's an in depth.
Look at your documentation withyour credit report.
To make sure that you arequalified and in an experienced
loan officer can take thesedocuments and really look at
them almost in the same manner,actually in the same manner that
an underwriter will look atthem.
So that's pretty the most, themost common letter that we see
(10:52):
in this area is the preapprovalletter.
So you wanna make sure thatwe're at least doing that.
That's, that's the minimum.
If you're gonna be shopping andhaving, you know, a competitive
offer, when you say Joe, Yes.
Oh, absolutely.
And, and, and, and that's halfof, uh, well, more than half the
battle, uh, just as you werementioning, um, you know, we, we
see, we see proof preapprovalletters everywhere.
(11:15):
I mean, like you're saying, it'salmost, you can just pull it off
a, a serial box.
Um, it's, it's, they're justvery common.
They are very generic, as yousay, and very broad.
Um, and then yes, to get moreinto the specifics and have a.
Fine pinpoint idea of what it isthat you can afford.
Totally agree with you.
(11:35):
We need to get this pre, uh,approval letter.
I'm sorry, prequalifiedprequalification letter out.
So we can go ahead again, makesure that we do have all the
information that we do, uh, thatwe're asking for.
Yeah.
So we want that pre thepreapproval letter is gonna be
the in depth.
Fine.
One of the pre-call is gonna beour generic one.
Absolutely.
So, and then, geez, I get thoseback well, you know, it's funny
(11:58):
because people do use theminterchangeable.
Um, mm-hmm and honestly, youknow, some people may not know
the difference, but there, thereis a difference on what's out
there.
And I would say that.
The buyer really wants toprotect themselves and not do
that.
Pre-qualification letter mm-hmmbecause so many things can be
overlooked and apre-qualification letter because
(12:19):
nothing's being looked atnothing's being checked, nobody
going behind you.
Exactly.
And verifying that, what you sayis accurate.
Right?
So, and real life scenario I'vehad, I've had an offer.
We again, on a weekend spent asat.
It was a Saturday afternoon,about four o'clock in the, a.
And met, uh, an individual and,and asked if she had her
(12:39):
pre-qualification letter.
Absolutely does.
So we go down, um, the, we hadto do this old school.
She's a bit of an older woman,um, did not have all the
technology on her phone that werequire, or yeah.
For any of the, um, e-sign andso forth regardless, um, asked
her if she did have herpre-qualification letter.
And of course she pulled it outin paper and it was from one of
(13:02):
our larger.
And the problem with thepre-qualification letters as we
were just stating they are justso generic and basic, they'll
give us a number mm-hmm as faras the, the conversation that
had been had, and it'll simplystate out there, these
individuals are qualified up tothis dollar amount.
(13:23):
and with these larger banks,unfortunately in a
pre-qualification letter,sometimes you can't contact
anybody.
That's very true.
Yeah.
Yeah.
So on the weekends, when wecan't contact anybody, just like
we mentioned a few minutes ago,um, we're, we're dead in the
water, right.
Um, or.
You might get into a goodposition.
This is where we talk about ourfiduciary responsibilities with
(13:43):
our clients.
You might be in a great positionto have an offer put in.
Okay.
Maybe you're the first one.
Maybe you're only the first of10 or second of 10, which is
great earlier the better.
Right.
But at the same time, typicallythat's associated with or
accompanied with a due diligencecheck.
My, if you were to submit yourdue diligence check with your
(14:04):
pre-qualification letter, andthen when you went to get
preapproved and you didn't thennine times outta 10 and even
nine and a half times outta 10,that due diligence money is.
It's forfeited.
Yeah.
And, and, and again, a goodrealtor will spot this.
A good lender will spot this foryou, but at the same time, we
(14:29):
wanna make sure that you're notgetting yourself into these
positions, um, that are gonnaaffect you negatively.
Right.
Which is why we go ahead andcall this pre-work right.
Exactly.
Now there is one more letterthat you will see.
You're not gonna see this asoften because it does.
A lot more work on the lenderside.
(14:49):
And so that is the, thecommitment letter, a bank
commitment letter.
And this is essentially iswhere.
The file has all the documentshave been collected.
Uh, we review it just as wewould the preapproval, but then
we upload it.
Um, and have an underwriter,take a look, actually take a
look at the file.
Now it's really nice to havethese because you know what the
(15:10):
conditions you know are, andthey're laid out, you know, and
the paper, you can just startchecking'em off and get it done
and put you a step ahead of theprocess.
The con is, is that it is quitea bit of extra work to, to go
through this.
And like I said earlier, a goodloan officer, who's just doing
this and knows what to look outfor.
Doesn't need to have this done.
(15:30):
Can competent, you know, canissue that preapproval letter
with a lot of confidence, butthe commitment letter is
underwritten.
It does go through anunderwriter's check mark.
So.
The downside to it again is thetime that it takes to get these.
And everybody's a littledifferent out there.
Lenders are different as far astheir turnaround time, but
(15:53):
basically the overall.
Deal with commitment letters andwhy you don't see'em as often is
because of the, that time andthat commitment.
So you, our back office, ourprocessors are underwriters.
A lot of times they're paid onproduction based on how many
files they get through how manyclothes, you know, almost
commission.
And so if you have a file that'scoming through that, doesn't
(16:14):
have a property attached to itand may or may not ever have a
property attached to it.
It's kind of free work for them.
So to speak.
And I'm just letting you guys ona little, little trade secret
there on what goes on in thebackside, but it, you know, it
is what it is.
We're all, you know, we're allhere, um, you know, to earn a
living.
So I don't think there'sanything wrong with, you know,
kind of revealing that so thateverybody knows what, why you
(16:37):
don't see these as often, but alot of companies are, are
getting better at em.
Um, during the pandemic, it washarder to get'em because we were
just overwhelmed with, withThere was no room in the, in.
During the pandemic and thepipeline to do these free, these
free B, so to speak.
So.
But we, we can do'em more now.
And, um, I do do them on fileswhere maybe it's a little
(16:59):
questionable, you know, there'ssome things going on.
Maybe there's a rough patch inthe credit.
And I wanna, I just wanna havethat extra security behind me,
but it is a nice letter to have,because it, it is a one step
ahead.
Like you've already gone throughthe underwriting process.
So now it needs the house, youknow, so we have our conditions,
let's get the house and let'smove forward.
So it'll speed up the process alittle bit as.
(17:22):
but it takes a little morepreparation than the other two
letters do.
So.
Absolutely.
Absolutely.
Well, a couple, couple questionson that.
Uh, if you got just a second.
Yeah.
Um, so coming with thecommitment letter, you had
mentioned that, uh, that goesthrough, or that is typically a,
a loan or the portion of theloan that is, uh, going through
underwriting mm-hmm okay.
(17:44):
Um, can you tell me what anunderwriter or underwriting is?
Yeah, so the underwriter isessentially the gatekeeper to
the loan process.
mm-hmm so we it's a love, haterelationship, everybody you love
it when he goes well, and youhate him when it doesn't but
essentially the underwriter isgoing to be someone who is
(18:05):
specifically trained in the loanproduct that you're doing.
And a lot of times loan productswill have.
Different requirements anddifferent underwriters that look
at files, but the underwriter isthe person who's the gatekeeper
to the file they look throughand they go behind me and make
sure that, yes, this was done.
Yes, this was done.
Yes.
This meets this credential.
They, they check it off and theymake sure that, yes, this file
(18:27):
does work.
And then they use their magicand they do a bunch of other
checking behind that to see ifthere's any judgements, any
liens, anything else going onwith this person?
It may not have come up in theinitial, you know, preapproval
process.
Right.
So what it sounds like isbasically, um, judge and jury
they're they're the final say?
Yeah, absolutely.
On, on whether or not you goforward with the home.
(18:49):
They're they're they're like the99 point.
9% of the final say there areoccasions, you know,
underwriters are people too.
So there are occasions wheremaybe they misunderstand a
guideline or you have to push itup to, to management and a good
loan officer.
Won't be afraid to do that.
I'm certainly always willing togo to battle with an
underwriter.
(19:10):
No, I'm right.
I know I'm right on this.
So, you know, we've, we've allhad those battles and, and, you
know, it feels good when we win,but yes, the underwriter is
definitely.
Judge and jury almost.
A hundred percent.
Mm-hmm yeah.
Perfect.
Perfect.
Well, and, and the reason I askthat, um, and, and thank you for
(19:30):
the clarity on that, but thereason I ask that is, you know,
we still need, um, uh, theassurance that again, the
process is gonna be completed.
Yeah.
Um, so, so the security, asyou're saying with the, you
know, underwriting and orcommitment letter, even though
it may take a little bit more.
certainly gives you a better,um, more security.
(19:51):
Yes.
Um, in, in, in your purchasepower mm-hmm absolutely.
Okay.
And I do know that there aresome, some loan programs or
products that are out therenowadays, um, that are
highlighting the fact that thesefolks or, or, or they're, uh,
loan will be processed up until.
Say an underwriting process, um,or point, and then from there,
(20:11):
you know, you're just waiting tofind the right house.
Right.
Exactly.
Is that that about right?
Mm-hmm yeah, exactly.
Okay.
Wonderful.
Wonderful.
So in that again, is the purposeof getting these preapprovals or
at least having a preapprovalupfront mm-hmm um, again,
pre-approval.
Not necessarily the pre-qual,but the pre-approval and
commitment letter that comesthrough underwriting are, are,
(20:33):
are certainly the better lettersto have.
Uh, rather than again, the firstone we had mentioned, which is
just pre yeah, absolutely.
And it, and it's all about theconsumer's protection, you know,
mm-hmm if, if you're buying ahome and you're putting down
five, 5,000 in due diligence,you don't wanna risk that money.
You wanna do it with confidence.
You wanna know, I don't care howmuch money you have in the bank.
(20:53):
Nobody wants to just give.
five grand.
No, you know, on a whim.
I mean, that's, mm-hmm, that'snot smart.
So having, having the confidenceand feeling assured that when
you make that offer and youwrite that due diligence check,
that that your offer is prettysolid, that you have a really
mm-hmm good chance of thishappening.
Uh mm-hmm that it just gives youconfidence and it, and it makes
(21:14):
the whole process a lotsmoother.
Great.
Totally agree with you.
I wish all of my buyers wouldhave some sort of commitment
letter, um, at least apreapproval letter in their, in
their pocket.
Um, you know, again forsecurity's sake, I, I, as well
as you know, that these folksare dealing with real money,
real savings, and by puttingthat information, putting that
(21:36):
money up front based oninformation that they're
receiving.
From a lender and, or a realtoror both, you know, uh, they,
they, they're putting somesignificant trust in and, um,
and some financialresponsibility on our show.
Yeah, absolutely.
Um, and, and that's somethingthat, again, um, Jean, I know
we've talked about this before,but we both take very, very
seriously, um, you know, again,as our fiduciary
(21:56):
responsibilities back to ourclients.
So we wanna make sure that, uh,again, the request that we make
of them to be prequalified.
Preapproved and again,underwritten, um, it's not just
to run them through the ringer.
No, absolutely.
It's actually go ahead and getthem going.
No, it it's, it's a protectionit's protection for the client.
It's a protection for me, youknow, to make sure that I'm, I'm
(22:19):
doing, like you said, my, my duediligence, it's a protection for
you.
Yeah.
To make sure that, um, thatyou're not putting the buyers in
a difficult position, it's allabout protecting them.
And it's a very, very importantpart of the process.
Now.
Mm-hmm Let's talk about anotherside to this that, uh, people
don't talk about.
And that is what happens whenthe buyer decides to do some
(22:45):
stuff with their credit afterthey've been preapproved.
And I think this is really,really important.
So you guys getting ready to buya house?
Listen, if you've beenpreapproved based on X and then
you go out and you buy a.
or you buy some new furniturebecause you're getting ready to
(23:07):
buy a new house and you put iton our rooms to go credit card.
I have had, I I've had thishappen.
Mm-hmm you change your profile.
Yep.
You and some people, it may notaffect them at all.
It may be a very, very smallpercentage of their, their
income.
So it really doesn't change it.
But the other side to that is itmay change that greatly.
(23:30):
It it's all a percentage.
And you need to know before yougo into this, will buying this
car or will getting.
Credit card affect my ability topurchase the house that I want.
You may have to go from thedream house to like selling for
the okay house.
If you do that.
Mm-hmm Yeah, yeah, absolutely.
(23:50):
And yes, that has happened onnumerous occasions.
I know you see it more oftenthan I do.
Um, it's common, but yes, it'salmost common.
It, it, that it, we talk aboutit and people joke about it and
it does happen.
It happens all the time's.
And let me tell you.
if you've ever gotten a newcredit card, do you know?
Cuz then we have to startdocumenting.
(24:12):
Then the documentation processcomes in.
I have to know.
Okay.
Yes.
Let's say it doesn't affect yourability to buy.
I still have to document itbecause that new credit card is
not on your credit report yet.
Mm-hmm it takes a little bit forthat to happen.
Have you ever tried to go get acredit card statement from a new
credit card?
(24:33):
It's not easy.
No, no, it's not easy at all.
No.
So, so what's the best advicedon't do it.
well, fantastic.
The best advice don't do itunless it's an absolute
emergency.
I mean, there, it, it canhappen, but you need to know
that you're gonna be doing somework to get the documentation
(24:55):
that you'll have to provide.
If you open a new line of creditnow.
There are different lines ofcredit.
So they're not all as difficult,but credit cards, especially
furniture cards can be, can bedifficult to get that
documentation that we need, evenif it doesn't affect their
buying power.
So just be really careful on it.
If you've been preapproved basedon this set of credentials, this
(25:18):
this file.
Mm-hmm if you don't have to,don't open up new ones until
after you've closed and, andyou're done with the house.
Wait, because, oh yes.
You know, if you are.
You know, if we're three daysfrom closing and they do final
checks because they do finalchecks and this, they do final
checks.
Yeah.
And this pops up, we're probablynot closing in three days.
(25:41):
Right?
Right.
Your closing's now delayed.
Hopefully the buyer, you havethe grace period at the end of
your contract.
And now the seller doesn't backout because all of a sudden, we
can't close on time when we'resupposed to close.
And that does happen.
It at absolutely 100%.
Does happen.
So mm-hmm, the take home advicehere is talk to your loan
(26:02):
officer.
If you've already gone throughand been preapproved, or let's
say you just, you just opened itwhen you talked to them, let
them know because it takessometimes 30 to 90 days to, for
that, um, for that debt to showup on the credit.
Sure.
So if it's not there, we don'talways know about it until it's
(26:25):
until that 30 or 90 days.
So just, you just gotta be openand honest and talk to your loan
officer.
We're here to help you.
Yes, I totally agree.
And that's, uh, that, that's,that's a great statement is yes.
Please be open and honest withboth your realtor and your loan
officer.
Again, reason being, you know,we, we, we, we.
(26:46):
You're loan officer in yourrealtor.
We both have a, a, a similarresponsibility, um, which is
again, getting you into thathouse.
And if I'm not getting theinformation over to her, she's
not getting the information overto me.
Uh, you know, again, there's,there can be a simple miss and.
And again, what what's at riskis, is some significant
financials.
(27:06):
Yeah, absolutely.
Again, whether, whether or notyou're into your due diligence
period, if you've gone beyonddue diligence and you're now,
um, what a lot of folks call onyour escrow.
Um, but around here we call thatearnest money.
And again, you've, you've gotsome significant discounts.
I'm sorry.
You get some significantdeposits that arrive been made
and, you know, by going out andbuying a$700.
(27:29):
So.
You know, you could really messyourself up and, and again, that
could be a, you know, realdisaster for buying your house
on time.
Yep.
And, and also putting it injeopardy where you might only be
able to close.
Yep, absolutely.
Yeah.
So good point.
So yeah, just, just be open andhonest with you.
You know, people tend to benervous about talking to the
(27:52):
loan officer about digging intotheir financials.
Mm-hmm especially for some home.
Mm-hmm it's a big deal to buy ahome, you know, and if you've
been saving up and gettingready, it could be, it could be
nerve wracking to actually havethat conversation, but we're
here, we're here to help.
We're here to get you throughthe process.
Mm-hmm you know, I always jokearound a little bit that going
(28:16):
through the preapproval processis kind of like me coming over
to your house and unannouncedand opening up your underwear
drawer and just going throughit.
Right.
Yep.
Whatever I find is what I find.
But, but my job is yes.
I find I may find something, buthow do we work it into the
(28:38):
scenario and how do we get pastit if I do find it right.
And that's my job, my job is toadvise you on how to move past
any issues that there may be.
If we can't, now, there may besome issues we can't move past
right now.
but you need to know that beforeyou drop 5k and due diligence
and lose it.
Absolutely.
(28:58):
You need that 5k and duediligence for six months or a
year from now when you can buy.
Right.
Right.
So don't be afraid to talk tous.
There.
There is nothing we haven'tseen.
Like right.
We're kinda like a financialdoctor.
We have seen it all.
We have heard it all.
You are not gonna shock andsurprise us.
Mm-hmm no, no, no.
Ma'am we are, we are, we haveseen enough yes.
(29:20):
Well, what we need to do and,and again, we just need to make
sure that folks understand thatthis is pre-work it's yes.
It's not necessarily homework.
Okay.
It's pre-work because these arethe things that we wanna see up
front and.
Protect you financially.
Yes, absolutely.
So do talk to your loan officer,do get preapproved.
Don't open new accounts.
(29:41):
right.
Don't hide stuff from us for thelove of God, please don't hide
stuff.
So those are the big takeawayshere.
So we, we are absolutely here tohelp you.
And if you guys have anyquestions whatsoever about
getting started in the process,we're gonna have all of our
contact information listedbelow.
For you to reach out to us andanswer any questions that you
(30:02):
might have.
Jeff is North Carolina area, um,specifically Greensboro triad,
and I'm currently licensed inNorth Carolina, Georgia, and
Virginia.
So I'm happy to help him throughthose areas.
Fantastic.
Fantastic.
Yes.
So folks, if you have not yet,and you are interested.
In the home buying process,please reach out, um, and, and,
(30:25):
and get started on, you know, ifanything, the pre-qual
information then move up intothe preapproval information, uh,
a preapproval step.
And, and then if we can keepmoving it to the commitment
letter, um, and the underwritingstatus, and that would be again,
Uh, the best place that youcould be once you get into, you
know, uh, a realtor's car, um,or if you're out there looking
for new homes now.
(30:45):
Absolutely.
Well, I think we have just aboutcovered all, any last minute
details that we need to wrap upor no, I don't think so.
At this point, other than, youknow, again, the market is still
cruising at a, at a great rate.
Um, rapid rate, I should say.
Homes are still moving.
Uh, equity is still growing.
So we need to go ahead and makesure that you folks are in the
(31:06):
right position to get that housewhen you're ready to get that
house.
Absolutely.
So we'll see you guys, hopefullyin about a week, we are gonna
come on and talk about gettingstarted with your real estate
agent, what you need to knowabout picking an agent and why
it's important to commit to thatagent.
So thank absolutely.
Yeah, absolutely.
Thank you guys for hanging inthere and we'll see you next
show.
(31:27):
See you next time.
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