The Importance of a Preapproval
by Tom on May 14, 2007
in Uncategorized
I just read an article which stated that, because of the subprime lending defaults that are becoming more and more widespread, anywhere from 15% to 56% (depending on which avenue you follow) of the places where one can get a mortgage are tightening their standards compared to what they were 5 to 6 months ago.
That’s why, for many of today’s home buyers, it’s more important than ever to get preapproved. The rules have changed in a fair amount of the game and you need to make sure that you (or your clients) can really afford what they want.
One of the examples of how some of the rules have changes is on 80/20 mortgages. The ability to get an 80/20 mortgage (80% first, 20% second, no downpayment, no PMI) is much more limited than it was 6 months ago. I’ve had two clients in the last month who I was able to get approved on a 100% first mortgage with PMI, but we couldn’t get them approved on an 80/20 because the rules had tightened.
Questions?
