I meet with a couple the other day to do a preapproval for them. Their comfort level for a mortgage payment is a top priority as we go through the preapproval process, I’m not talking about how much they will qualify. So often I meet with someone that may have already met with another loan officer, but for whatever reason, it wasn’t a good fit.
They mentioned to me that they had been prequalified for a particular loan amount. My immediate question, do you have any idea what monthly mortgage payment that translated too? Very often they will say no. I then ask what is their comfort level for a mortgage payment. OK, now let’s estimate a monthly property tax and homeowner’s insurance and from those numbers we can come up with how much of a mortgage the balance will translate too.
Unfortunately, what they might have been approved for and a mortgage payment they can afford just doesn’t match up. Not all preapprovals represent the true needs of the client. Coming up with a mortgage payment that someone is comfortable with, matter more to me than how high I can get them to qualify for a mortgage. Remember, not all preapprovals are created equal.
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