Looking for a home or condo in South Florida: Get a Mortgage Pre- Approval first

Mortgage Pre-Approval are a must

There are several reasons why you may want to talk to your Mortgage Company of other Lender prior to getting serious about searching or buying a condo in South Florida.  A recent poll of Realtors revealed that most Real Estate Agents that represent Sellers will advertise to other agents that they will not present offers made on properties unless the buyers are either paying cash, or have a mortgage pre-approval already secured by a lender. There has also been a recent upward movement in the number of buyers that need mortgage financing, partly because of cash buyers dropping out of the market, but mostly because of lower interest rates make it advantageous to buyers.

Mortgage Approvals for condo Buyers take time

From a Buyer's perspective, talking to a Mortgage Lender is very important because of the process involved in getting a mortgage. As R. Lewis, a borrower and buyer in Fort Lauderdale recently learned when signing a contract that required him to get mortgage approval in 30 days, mortgage approvals sometimes take time, and require participation of people outside of the contract. Mr. Lewis signed a contract where he agreed to put down 20% and also agreed to apply for a loan of 80% on a condo he was trying to buy. Well just after signing the contract he applied for a loan with a very well known Lender that advertised on TV and the Internet. The lender sent Mr. James a letter of introduction which set forth how the loan process was to work, and in the letter there was a statement that the Buyer had to provide documents  that would "Support the Association's  Compliance with the Lender's Guidelines". Mr. James asked via email what these documents were, and here is where the problems started. Over a 3 month period, Mr. James received over 40 emails from the Lender advising him of different and additional documents that were being required in order to approve the Condo Association under the Lender's Guidelines. The loan was never formally approved, and Mr. James is now in a lawsuit over whether or not his deposit will be returned. The deposit represents all of the savings Mr. James had, and this is a life changing experience for Mr. James, only because he believed an add from a National Lending Institution. The lesson to be learned from the experience of Mr. James, is that if you can, use a local lender if you are thinking about buying a South Florida Condo, because the Lender has to approve both the Borrower, and the Condo, and if the Lender does not have a real person that you can call on the phone, you probably have the wrong Lender.

Borrow More by Getting a Pre Approval?

The second big reason to get a formal loan approval before you get serious about looking for a condo, is that sometimes you will find out that you can actually borrow a lot more that you thought that you can get approved for. A poll taken recently of individuals applying for loans revealed that the average buyer can afford a loan that was 11% more that what they thought they could get approved for. This means that if a buyer is looking to buy a condo for $300,000 they generally can afford a condo that is selling for $330,000, which could be the condo that they are really looking for. If you are a Realtor, and your client tells you that they are looking for a condo, and they are looking in a specific price range, the first thing that you need to confirm is what is the reasoning that they chose that price range. The Buyer may really appreciate the fact that you are helping them purchase, or at least be in a position to purchase a condo that has more amenities, a better view, or even more space. 

Mortgage Pre Approval Eliminates Conditions

The third reason why Buyers should seek loan approval prior to searching for a hoe or condo is that in the loan approval process, the Lender or mortgage company will advise you of the conditions which must be cleared prior to you purchasing. These conditions can be as simple as paying off a credit card, or explaining why you were late on a credit card payment 2 years ago.

If you have any questions about the Loan Process, we will be glad to recommend a local lender that will work with you to provide you with a Pre Approval, or at least let you know what is necessary to obtain a Pre Approval.

Please feel free to call Denise at 866 783 6011 or email denise@condo.net

BY: Melissa & Denise Stewart