Don’t Lose Out on Your Dream Home this Spring: Suffolk Federal Shares First Step to Ensure You Have that Competitive Edge

Spring will soon be here and with it, the height of the housing market will arrive. For those searching for their dream home, you want to make sure you are in a strong negotiating position and have done everything possible to set yourself apart from your competition.

To position yourself as a qualified buyer and to get that competitive edge, you should receive a preapproval or prequalification letter from a lender. This will provide the homeowner the assurance that you are a “ready, willing and able buyer” who has the ability to obtain the necessary financing to purchase the home in a timely fashion. It can also be a valuable tool should you find yourself in a competitive bidding process. “A qualified buyer is appealing to a motivated seller and could be the factor that determines whether an offer is accepted and a transaction takes place,” explains Keith Miller, EVP & Chief Lending Officer of Suffolk Federal. “While both the preapproval and prequalification process are valuable, the preapproval is a more secure document which helps to expedite the loan application and underwriting process,” he explained.

The preapproval and prequalification process vary according to specific lenders, but the fundamental steps are the same.

Preapproval

Stepping into a negotiation with a pre-approval letter will provide you with a stronger negotiating position than a prequalification letter. Rather than a quick submission online or over the phone to verify financials, the preapproval process involves a strict and detailed mortgage investigation which includes an application with extensive documentation. This is mandatory to perform a financial background check as well as factor in your current credit rating. Essentially when you, as a purchaser, are pre-approved, the lender has committed to lending you financing based on your financial stability once the right home has been found. There is still an underwriting process which needs to be undertaken.

Prequalification

A prequalification, on the other hand, provides you with an estimate or quick determination of how much you can PROBABLY afford when purchasing a home based on your debt-to-income ratio. It is not as involved as a preapproval process. You will be asked to provide your overall financial picture to the lender to determine how much of a loan you can expect to “qualify” for. A current credit report is not necessary or any other in-depth information beyond what’s provided, making the pre-qualified loan amount more of an estimate. With a prequalification, information is not verified through such means as tax or bank statements or payment stubs.

How Can I Prepare For A Preapproval?

To simplify the process, you will need to have following documentation when you speak with a mortgage consultant:

· Income Verification

· Proof of Assets

· Debt Summary

· Credit Report

· Personal Documentation (Driver’s License)

Suffolk Federal offers a wide range of low fixed-rate and variable rate mortgage products for every need. In addition to home mortgages, the credit union offers:

· Hybrid Adjustable-Rate Mortgage

· First Home Club (as well as First Time Home Buyers Club account)

· Home Assistance Subsidy

To become preapproved or prequalified for a mortgage, Suffolk Federal invites members to make an appointment with a Mortgage Representative at (631) 924-8000.

About Suffolk Federal

Suffolk Federal is a not-for-profit cooperative financial institution chartered in 1967 by the National Credit Union Administration (NCUA), and is owned and operated by its members. The volunteer-directed credit union has assets in excess of $1 billion, 10 branch locations and more than 60,000 members. Suffolk Federal offers all members incredible benefits like free checking, free online banking, low interest rates on home and auto loans and much more. Membership is open to anyone who lives, works, worships, attends school or regularly conducts business in Suffolk County, NY as well as immediate family members of current membership. To learn more, visit www.suffolkfcu.org, call 631.924.8000 or visit any Suffolk Federal branch today.