There’s intense competition for homes in areas where home inventory is low, and cash buyers often get the nod in situations where there are multiple offers.
But there’s a new option for non-cash buyers that could help them compete in these situations, according to a recent article in the New York Times.
Some mortgage lenders are offering “pre-underwriting.” Rather than a simple pre-approval for a loan, which is usually based on the borrower’s credit report, pre-underwriting is a complete review of all documents that would be required for loan approval. This “pre-underwriting” strategy puts borrowers on more equal footing with cash offers.
Pre-underwriting is much more involved and time-consuming than a typical pre-approval, so not all buyers are eligible, but that could change in the future. One mortgage company offering pre-underwriting is Luxury Mortgage in Stamford, Conn.
“We’ve agreed to do this very recently, and I think it’s only necessary when you have a pretty hot market,” Luxury Mortgage’s Peter Grabel told The Times.
No two markets are the same, so if you have questions about your market and your financing options, get started by contacting your local market expert Jose Rey and his team Finding Home SC!