Pre-Approval Without Real Numbers? Here’s Why That Doesn’t Work

Hey guys, welcome back to another week. Let me start over. Hey guys, welcome back to another week of Mortgage Matters in Minutes. I'm your host Brent Rasmussen and feel free to leave that in. We record once and we don't leave edits to show that obviously we are real people that are, you know, really recording and sometimes mistakes happen in life and we take accountability. So here's where we're at today. How much can I get a pre-approved for without an application? And we get this question way too many times a week, which is I have no information to give you and I want you to tell me how much I can buy or would I qualify or would I not? And we're leaving to guess because we don't know your financial situation. We don't know your credit, your debts, your income, your assets, all the above which goes into it. Lending isn't a emotional decision like hey we like you you look you know like you're going to pay your bills. It is a numerical system based upon rules and facts of again credit income assets. So let's talk about this today and see where we land in regards to how much I can get a preapproved for without an application. And what some people are calling about is just generally speaking what would I qualify for? But I can tell you in conversations when people are calling, they're wanting exact answers, but scared that their credit's going to get pulled and ruin their credit, and they don't want to dig up possible information, things like that. But if we're giving you, say, a pre-qualification, which is just talking through numbers, that is not going to work or assist and help you if you're out looking for houses and want to put an offer in on one. A pre-qualification is just us talking. A pre-approval is us looking at the facts to assure on paper what your information is to make sure we can get a loan moving forward. So, in regards to this pre-qualification, is it a good thing? Yes, it can be. Just having a conversation and knowing that it is what it is, but I know a lot of people want to know an exact number. We're going to give you a big range because we don't know your debts. We can get it verbal, but I can share with you many people forget about things that they're telling you during a pre-qualification, even though we ask. But when we go through a pre-approval, a full application, things come out and things change. And when those things change, people are mad at us for giving them bad information, which is not our intent whatsoever. We're not going to know your exact debt payments. Most people know their balances. They don't necessarily know what the minimum payment is. And those are going to be what is factored into the debt to income ratio to get qualified. Well, like we've always stated, getting a pre-approval done early never harms or hurts you. It's always better to get that out of the way so you know a more strategic number when you're out looking for houses. And with us reviewing your paystubs, your tax returns, your bank statements, we're looking for any issues that can come up during the underwriting process that we get discussed and narrowed down right away. So even though it may sound like filling out an application is very daunting and very official in our world, I don't feel it to be as scary as people think it is. Really, when you're putting an application is, all we're doing is narrowing down variables. We're having you put information in. And it's a place where we can put all of your information into and narrow down all the rules that exist to make sure when you're needing to close on that house, everything qualifies and you're ready to go with your financing moving forward. So, if you are calling and just wanting general questions, that might take a little bit longer than us actually doing an application because we have to then give all the extra disclosures and the what-ifs and if this is a change and this and I know in speaking with clients, they get frustrated by not having the black and white answers. And we want to give you the black and white answers, but the only way to do that is to have the data to be able to calculate out the math. So, starting your pre-approval early is never going to harm you. Do not again be scared of a credit report being pulled. Do not be scared at all of turning in documentation, but also note if you know about things are to change, maybe you're paying off bills, maybe you're getting a raise at your job, so on and so forth, we can factor those things in on a pre-qualification or even a pre-approval and put that as a contingencies on what is to happen. I know we chat with a lot of people and say, "Hey, next month I'm going to get this big bonus. I'm going to be using that for a down payment, but I don't have it right now. Well, we can still factor that into the situation to know what you have in moving forward that you still would qualify. So, in my opinion, it's always better for the buyer to go and start an application, get variables narrowed down so you know where you're at. If I tell you you're preapproved or pre-qualified, I'm sorry, to, you know, 300 to 400,000, that's a pretty big window of different types of properties, but at the same point in time, if I do a pre-approval and say, "Hey, we've calculated the max you can go to is 425." Now, you know where the max is. You don't need to spend the max. And we don't always preapprove people to the max because some consumers would spend that amount of money. and we don't want to get people over their skis, out of their budget, things like that as well, too. So, we do see people just wanting to know answers, and that's totally fair. Totally understand that. but when conversations get deeper on more exact what you want to know, that's when you're going to want to complete that application. And don't worry about the application being perfect. just start getting variables of information in there so we can start reviewing credit, debt to income ratio, down payment, and making sure those three important things are where they need to be at to qualify for a loan. I'm Brent Rasmussen, owner of Mortgage Specialists here each and every week. If you enjoy the information, like and subscribe down below. Leave a comment. We'd love to hear from you and thanks for checking us out. Have a great one. Mortgage specialists. Driven. Trusted. Reliable.