Earlier this week I was having lunch with a coworker, discussing the current financial situation and comparing cutbacks at home and in our various departments at work. While we were talking about issues facing people we knew he shared the account of a close friend who had recently begun to look for a home. He had already been pre-approved for a home loan and was busy finding homes in his price range when the lender let him know that his pre-approval had been pulled, leaving him without the ability to purchase a house.
Having home ownership snatched from your fingertips, especially after you already met the tighter loan restrictions that the meltdown brought about would be a major downer. When I was telling my parents about this unfortunate story they said it reminded them of the circumstances surrounding their home buying process. My parents had been house hunting for a while and my dad left work early to get the loan finalized. In the time it took my him to take a shower their ability to buy afford the homes they had picked was wiped out because Ronald Reagan had been shot, causing the financial markets to take a drastic hit.
With every passing day I become more concerned with the ability of people like myself to get a mortgage and the affect this has on the overall market. With homes languishing on the market or slipping into foreclosure one of the quickest ways to bring relief is to get qualified buyers into these homes but if banks are still pulling back on offering credit then we are in for bigger problems.
It isn't clear how widespread the current problem of yanking pre-approvals is in the face of the financial crisis but it's a reminder to anyone currently looking for a home to double check the application's status with the lender. Be sure to fill out the poll below if you're pre-approval has been affected.
Pre-approved for a home mortgage? Think again!