Buyers needing financing for their home purchase often struggle to compete with other buyers willing to pay all cash to close the sale. All-cash buyers are making up an increasing part of sales too. The National Association of REALTORS®’ latest existing-home sales report shows that in February all-cash sales accounted for 35 percent of transactions.
Some lenders are helping buyers better compete. Known as “pre-underwriting,” they’re putting loan applications through a more thorough venting process before the buyer even enters into a contract for a home, The New York Times reports.
For example, Luxury Mortgage in Stamford, Conn., has started pre-underwriting some of its clients. Unlike preapprovals for a specified loan amount, lenders take the approval a step further by thoroughly reviewing all documentation that would be required for a formal approval. This type of underwriting is being completed after a house is selected and an offer is accepted, but before the contract is in place.
Another lender – Mortgage Master in Walpole, Mass. – has also taken its preapproval process a step further. The lender says for some of its buyers it is verifying the same income and asset information upfront that it would typically do for a processed loan application. The aim is to put the borrower in the same position as a cash buyer, Paul Anastos, president of Mortgage Master, told The New York Times.
Related articles
Please help to keep this blog going
Let us Sell or help you buy your new home or land
John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
Email John
BRE#00669941
