By Santy King PRMG Mortgage
Even in a HOT SELLER market this statement is true: ‘Let’s control the things we can control’. We have heard stories of deals falling apart just a few days before closing and with so many moving parts sometimes life happens. You are about to take the home off the market for these buyers and it is important to go beyond highest and best price. You need to understand the buyer’s financial position and what steps the lender has taken to make sure they are pre approved to purchase a home.
What you need to know about a buyer’s financing before accepting an offer.
Your agent should interview the lender and ask the following questions to understand the strength of the buyer’s pre approval letter.
- What financials are missing for a complete file to submit to Underwriting(UW) We are flushing out a couple of things with this question; How prepared and proactive is the lender with gathering documentation, and what unique situations this buyer may encounter during the Approval process.
- What was the outcome of the Automated Findings? Request a copy from the lender. This will tell you how easy the file will be for UW to processing. If the file has been ‘Approved/Eligible’ most companies will NOT need to have additional overlays, restrictions or hoops for borrower to overcome. The Loan Officer could black out the private information but the goal here is to communicate to the Loan Officer that you are paying attention.
- What is the job stability of the buyer(s)? Lenders look for stability and the ability to repay the loan
- Does the buyer(s) have sourced down payment? We want to know that the Lender has verified funds for the down payment or the Lender has a very solid plan on where the funds will be coming from
- How close are buyer(s) on the housing debt & total debt ratio? Every program has a front end debt ratio (housing expense) and a back end debt ratio (total debt), we want to make sure they are not at the max for either. If monthly expenses go up before the closing there could be issues to qualify for the program.
We all want as much money for the sale of our homes as possible and it is important to understand who has the best shot of closing on the loan. If you have additional questions or need to be pre approved for a loan, please email me at SKing@PRMG.NET or call 612-245-4000.
Senior Loan Officer
6009 Wayzata Blvd #105
St Louis Park, MN 55416
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