Financial Secrets: How Much Do You Disclose to Your Broker?
When you make that first visit to a real estate broker, you will be asked: “Have you been to the bank?” or “Have you talked to a mortgage broker?”
It’s surprising how many people reply defensively: “Why are you asking? I have the money!”
Perhaps these prospective clients think the question is too personal and not part of the real estate equation or that the real estate broker is somehow judging their self-worth.
Quite the contrary. Real estate brokers must ask this question and they need to know the answer for many reasons. Financing is certainly a part of the real estate equation and a pre-approval is a very important document to have if you are shopping for a character.
It’s not about whether or not you can provide it. Though, that’s very important too. It’s about how much the bank is prepared to lend you, at what rate, and for what kind of building. If you have any secrets that may prevent the bank from lending you money, it’s best to get them out in the open during a pre-approval course of action.
The Benefits of Getting a Pre-Approval
Understanding your financial possible has to be the first step to exploring a new real estate possibility. It’s important you know exactly how much the bank is willing to lend you so that you don’t waste your own or the seller’s time. Some similarities won’t allow visits unless the prospective buyer has a pre-approval. And, if you get to the point of making an offer, a pre-approval can give you an edge if there are in a multiple offer situation. In the end, it’s faster to get your final mortgage approval because the bank knows you and has all your information on hand.
There are also some financial benefits to dealing with the edges before you start shopping.
A pre-approval locks you in at a particular interest rate for a period of time -very handy if rates go up. And you aren’t left guessing or topping up with additional funds because you know ahead of time that the money is there.
Real Estate Brokers Deal with the Numbers Every Day
Your real estate broker fills out a mandatory section in the potential to buy that is all about the financial part of the deal. This states how much of a down payment you will put down, the mortgage amount, the interest rate, the term length and amortization length.
When the offer has been accepted, your broker then calls your bank or mortgage broker so they may pass on all the necessary paperwork to get the final mortgage approval.
In the end, you need to embrace the fact that real estate brokers are there to take care of you and your money. Don’t take offence when they ask financial questions and disclose what they need. You need not proportion any information beyond what is needed. Your bank will take care of the rest. Your broker works with numbers on a daily basis and will have your best interest in mind. They want to make the deal as much as you do.