Video Transcript
The absolute best time – to get pre-approved for your mortgage – was back on the day you first thought about buying a home. The second best time though – is today. Let’s get into it.
[The Homebuyer.com Doorbell] I’m Dan with Homebuyer.com. We are the mortgage company for first-time home buyers. Let’s jump in and talk about mortgage pre-approvals which – for first-time home buyers – is the leverage point in their home search – the point in the process – that sets the course – on what home you’ll get to buy – and whether you’ll even get to buy a home at all – and this is not something you want to find out after it’s too late – after you’ve already written a contract – or sent in your earnest money.
Pre-approvals are your protection from that – because a mortgage pre-approval is a literal approval – ahead of time – a PRE approval. It’s your proof – and piece of mind – that when you find a home – and make an offer on that home – that you will have a mortgage lender ready to back you – with money – and an interest rate – which signals to every home seller in your community – that you are a person to take seriously – that your offer is legitimate – and verified – with real bank money behind it. Hugely powerful – to the seller – and to you because – when you get pre-approved – which by the way – is way faster and simpler than you might imagine – just a few minutes online – when you get pre-approved – you also get to know your credit score – you get a mortgage rate to compare – you find out the smallest down payment you’re cleared to make – and – you find out the upper limits of how much home you can buy.
Remember when I said the best time to get pre-approved was when you started? This is why. Pre-approved better do better.
They know more so can buy more house for the same amount of money – the same monthly payment. You don’t want to find that out too late. You’re buying your house.
Can you get approved with 3 percent down and a discount on your mortgage rate? Your pre-approval shows you that. And I’ll continue because pre-approvals are the difference between getting your dream home or not getting it.
Your pre-approval is everything – it’s your dress rehearsal for the real thing – so you know exactly how things will go and how to make things work in your favor. It’s an advantage to you. But – of all the reasons – why getting pre-approved – today – is important – is because getting pre-approved – gives you the opportunity – to get a lower mortgage rate.
Now, I’m going to spend the next few minutes on credit reporting and how a mortgage pre-approval – opens the door – for you to raise your score. If want to skip this part, press option-arrow – YouTube will take you to the next chapter – but I think you’ll benefit from hearing this. Consumer credit reports and the free credit reports you get online – those aren’t the same credit report that mortgage companies use.
Which matters because the scores you think you have – don’t matter with your mortgage. Mortgage companies don’t use them. Instead – they use mortgage credit scores – which are based on decades of data – meant to predict one this: will this person miss their mortgage payment for 3 straight months.
Why 3 straight months? Because homeowners who miss payments 3 months in a row are in default of their loan and the lender has to repossess. That is bad scenario for the bank.
It’s a bad scenario for you – so the bank looks for signs that you might default – and to find those signs – it looks at your credit report. Now – the Federal Trade Commision – in a study – has already found that millions of U.S. consumers have errors in their credit – not small error – blatant ones – big ones.
The advantage of getting your mortgage pre-approved now – is that you can see those errors – in real-time – and have ample time before your purchase to correct them. Large errors you don’t find can drop your score by 50 or a hundred points – which – for almost everyone – is the difference a getting a mortgage and getting turned down. It’s so important to get your credit checked.
By a mortgage company. So now – is the part where you think to yourself, “No, I’m not doing that. I’m not letting them check my credit”.
Because that’s what everybody says. Look – I’ve been helping first-time buyers for 20-plus years. I’ve heard hundreds of permutations of that particular comment.
So let me catch you up. Twenty years ago, the credit bureaus found that some loan officers were exploiting customers and the credit scoring system. Namely, the loan officers knew each time a customer had their credit pulled by a competitor – it would register as a ding on the customer’s report and lower their credit score.
So these loan officers – told their customers – not to shop around – because if they did – they might not get approved – which is predatory – as a sales tactic – but it also was true. And wrong – so the Bureaus did some research – and what they found was home buyers who did compare mortgage lenders – who shopped – they had lower default rates – they were more likely to make payments. So the bureaus changed their system – and now today – when you get your credit checked for a mortgage – you can get your credit checked multiple times – by multiple lenders – and be protected from multiple hits to your score.
A famous Freddie Mac study shows that home buyers who talk to two or more lenders save $1,500 on their mortgage. That should be you. And I mean – you should get multiple mortgage pre-approvals.
Not pre-qualifications. That’s something different. Sounds the same.
Is not the same. Pre-qualifications are nothings – dinky template PDFs that give some version of “This person can probably buy a house” but pre-qualifications are not a substitute for getting your mortgage approved in advance. You can’t know your down payment with a pre-qual – you can’t know your mortgage – you certainly can’t get a seller to take your seriously – I mean – how serious could you be if you won’t even apply – so do it now – get approved – so you know – you can do it online – right now – at Homebuyer.com with the Immediate Mortgage Approval.
Like I said at the beginning: the best time to get pre-approved was the first day you thought about buying. The next best time is today. [OUTRO] Don’t forget to get your Immediate Mortgage Approval – you can do it in 3 minutes or less – with no paperwork – at the website – any time of day or night.
I’m Dan with Homebuyer.com, the mortgage company for first-time buyers. Happy homebuying.
