Even if you’ve been recently pre-qualified (or pre-approved) for a mortgage, it may be prudent to get “re-approved”.
The mortgage industry is changing quickly; being prepared beats the alternative.
Recently, mortgage lenders have made adjustments in what they will lend, and to whom. This shrinks the pool of eligible mortgage borrowers.
Some of these guideline changes include:
- Low or no downpayment loans may require more income and/or assets
- No income verification (i.e. stated) loans may not be available
- Higher credit scores may be necessary to qualify
In addition to tighter guidelines, many mortgage lenders are now required to pass higher fees and/or mortgage rates along to their clients as well.
The burden of these mandatory extra costs will be the difference-maker in a mortgage approval for some mortgage applicants.
Getting re-approved can give home buyers a realistic sense of how mortgage financing may shape up in the changed mortgage environment. It’s important to make sure that the mortgage plan still fits into your short- and long-term financial goals.
But, if nothing else, getting re-approved gives you the opportunity to speak with your real estate and loan officer about changes to the industry, and how it impacts you on a personal level.