When ever I talk with a new buyer, I always encourage them to call a bank or a mortgage loan company to get pre-qualified before they start looking at property. And very often my suggestion gets lots of resistance.A couple of weeks ago I got a call from Chris in New York City. He wanted to buy an investment property in Rochester. When I urged him to get pre-qualified, he told me he had excellent credit and had just bought another property in Schenectady. He ordered an air line ticket and when I reminded him that I needed a pre-qual letter in order to take him into listed property, he forwarded a letter from an internet mortgage company that was pretty worthless. The letter did not identify how much Chris could borrow nor did it acknowledge that he would not be occupying the property.
Long story short….I convinced Chris to call a mortgage consultant that confirmed that Chris had excellent credit BUT Chris didn’t have the necessary cash required for a down payment and closing costs. In other words, Chris didn’t qualify for a mortgage for income property! Fortunately for Chris, Mother Nature was kind to him. The big snow storm in New York City last week canceled his flight and so he will be receiving a refund for his airline ticket!
I know first hand how intimidating it is to get pre-qualified. My husband and I are in the process of purchasing an income property in Rochester’s South Wedge. I know the feel of glowing cheeks when the loan officer inquires about a long-forgotten medical bill for $25 that was sent to collections. I’m a firm believer in the philosophy that a poor credit score is usually an indication of poor character. But mortgage loan officers are not judgmental! If they were, they would never, ever survive in that line of work.
Please, people, make the call! Get pre-qualified before you start to look at property. Even if you have cash in the bank and good credit history, verify that there has not been identity theft, there are no forgotten bills or other surprises that will stand in the way of you achieving your dream of home ownership or landlord-ship! If you need the name of a friendly loan officer or two, contact me and I will make some recommendations.