What's in this article?
As a homebuyer, you’ve probably noticed that it’s often challenging to make your offer stand out amongst the competition. Especially in a competitive market.
But at Homefinity, we want to make sure our customers have an advantage over other homebuyers. That’s why we created our new cash assurance program.
A preapproval letter can only get you so far in a competitive housing market.
Most sellers that have multiple offers will choose the one with a preapproval letter. This letter allows them to feel confident that buyers will follow through with the deal.
If several homebuyers have preapproval letters, however, how will the seller choose who to sell to?
Our cash assurance program will show sellers that you’re a serious homebuyer—and ready to make a cash offer.
Learn more about pre-approval, our cash assurance program, and how you can get a home.com by Homefinity cash assurance.
What is preapproval?
A lender will send you a pre-approval letter when they are willing to lend you a specific amount of money to purchase a home.
To get preapproved for a loan, a mortgage company will want to confirm your creditworthiness.
This is done by reviewing the following information:
- Your debt-to-income* (DTI) ratio
- Loan-to-value (LTV) ratio
- Credit history
- FICO score
- Employment verification
- Divorce decrees (spousal or child support)
- Letters of explanation for credit blemishes
With this information, lenders determine if you’re likely to repay your mortgage and how much they’re willing to loan you.
A preapproval typically lasts for 60 to 90 days. If you wait too long to make an offer on a home, you’ll have to apply again.
The mortgage company limits your approval because your finances and credit score can change over time.
A preapproval is not a contract or binding loan commitment. It’s only the first step in the home buying process. It tells sellers that you can afford to purchase a home for up to a specific amount.
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Why do I need preapproval?
When you can compete in a difficult market, your chances of securing the home of your dreams increase. Preapproval offers you peace of mind that you’ve done everything you need to do to show that you’re prepared to purchase.
Once you submit the required information, a preapproval letter doesn’t take long to obtain. It should be a mandatory first step for any potential homebuyer.
Bypassing this step can make it difficult and even impossible to tour the home of your dreams, let alone make an offer on it.
While some agents will allow you to check out a house before receiving a preapproval letter, there is a chance they won’t because it could end up being a waste of their time and the sellers.
You want a solid pre-approval letter from a reputable mortgage lender.
It can be challenging to find a home in today’s market, and sellers are likely to be picky.
The last thing a seller wants is to get their hopes up, only to be let down when they learn the homebuyer they chose was rejected for preapproval and they have to find a new homebuyer.
How is the Cash Assurance Program better than a preapproval?
As more people learn the importance of mortgage pre-approval before making an offer on a home, the more competition you have as the buyers with preapproval letters increase.
This means that sellers receive various offers from potential homebuyers who all have a letter of approval. When that happens, a seller may be unsure who they should choose.
So in that case, how do you stand out among the other offers?
Sure, you can try to be charming and express your love for the house and your dreams for your family, but cash speaks louder than words.
With a home.com by Homefinity Edge pre-approval and Homefinity’s Cash Assurance Program, you’ll have the power to compete with cash and bring the most favorable deal to the table.
home.com by Homefinity cash assurance advantages:
- Seller will receive a cash guarantee on behalf of the buyer
- Buyer can compete with cash offers
- Borrower does not have to pay any additional fees to use this program
- home.com by Homefinity will buy the seller’s home if the deal cannot close for a financing reason by the contracted date
- If the guarantee is triggered, the seller may opt for home.com by Homefinity to not buy their home, and instead walk away from the deal with $10,000 paid by Homefinity, and the contract will be terminated
How do I get a home.com by Homefinity cash assurance?
If our cash assurance program interests you, learn what you need to do to get cash assurance.
Requirements that borrowers must meet:
- A home.com by Homefinity Edge Pre-approval*
- Financing with a VA or Conventional loan
- Purchasing a single-family residence
If you meet these requirements, our cash assurance program may be just what you need to close on the home of your dreams.
With a preapproval letter and a cash offer, agents and sellers will take you seriously and consider the offer you are making them.
Are you ready to take the next steps?
At Homefinity, we understand the importance of being the most favorable deal on the table.
The winning combination of a home.com by Homefinity Cash Assurance and a home.com by Homefinity Edge Pre-Approval will give you the buying power you need to compete with cash!
Our lenders are so confident in you closing on a home with our cash assurance program, we will buy the seller’s home if we cannot close by the contracted date for financing reasons.
There are many steps to buying a home—and we’ll be there for you through each and every one.
Reach out to us when you’re ready to take the steps for preapproval and apply for our cash assurance program.
*home.com by Homefinity Edge Pre-Approval is based on a full review of the borrower’s creditworthiness and is contingent upon there being no material changes in the borrower’s financial condition or creditworthiness at the time of final loan approval. Final loan approval is subject to the following conditions: (1) borrower has identified a suitable property, and a valid appraisal supports the proposed loan amount; (2) a valid title insurance binder has been issued; and (3) borrower selects a mortgage program and locks in an interest rate that will support the pre-approved monthly payment amount. Loan must close before the expiration date provided in the pre-approval. Offer not available on FHA, USDA, bond, or DPA programs. Sale of home proceeds contingency not allowed. Gifts not deposited are not allowed. Please note that submitting verifying documentation is not a requirement to receive an estimate of closing costs associated with a mortgage loan.