Loan Talk: A Conversation About Pre-Approvals & Point Buydowns

I've been working closely with Trevor Moore at CrossCountry Mortgage, and if you're looking for a kind, knowledgeable, and responsive loan officer, contact Trevor here. I chatted with him recently to discuss two topics that come up regularly with buyers—pre-approvals and point buydowns. Whether you're just starting to think about buying or you're ready to make a move, this is a worthwhile read.

First, Let's Talk Pre-Approvals

When you decide you want to purchase a home, one of the first things you need to do is take a close look at your finances and understand your buying power. For most people, that starts with a conversation with a loan officer and getting pre-approved for a mortgage.

Now, you could hop online, upload a few documents to some big national lender, and get a pre-qualification letter in minutes. But here's the thing: pre-qualifications can be inaccurate, and in today's market, they're often not enough. Sellers and their agents want to see that you've been properly vetted. It helps to have your vetting and loan letter from a local loan officer whom they know and work with. That's where a true pre-approval comes in, and where having a great local team (Realtor and loan officer) makes all the difference.

How long does it take to get pre-approved?

According to Trevor, it really comes down to how quickly you complete the application and upload your documents. For straightforward files, a pre-approval within 24 hours is very doable. More complex scenarios might take up to about a week—but as long as you stay responsive and engaged, the process moves quickly.

What if you find a home on a Saturday and need to submit an offer fast?

Trevor is available evenings and weekends for this reason. If you find the right home on a Saturday afternoon, he can review your documents and issue a pre-approval that same day. Not every loan officer operates this way, so it's worth asking upfront about your loan officer's availability before you start your search.

How long is a pre-approval good for?

Typically, it’s good for 90 days. And if it expires or you need to refresh it, it's fairly simple—you don't need to start over with a new application. Trevor just needs updated pay stubs and bank statements to reissue the letter.

One more thing worth mentioning: some buyers ask about getting a fully underwritten approval rather than a standard pre-approval. A fully underwritten approval is a more thorough review by the lender's underwriting team and can strengthen your offer. Trevor says it's not super common in Monterey County, though it does come up more frequently in competitive Bay Area markets.

Now, Let's Talk Point Buydowns

A points buydown is a way to lower your mortgage interest rate—either permanently or temporarily—by paying an upfront fee at closing. It's a strategy that's become increasingly popular when mortgage rates are higher, especially when sellers are offering closing cost credits.

How does it work?

For a permanent rate buydown, one point equals one percent of the loan amount. On an $800,000 loan, that's $8,000 per point. That doesn't mean your rate drops by a full percent, though—the actual rate reduction depends on market pricing and is typically around 0.25% to 0.375% per point.

Permanent vs. temporary buydowns: What's the difference?

A temporary buydown (like a 2-1 buydown) lowers your rate for the first couple of years before it adjusts back to the full rate. A permanent buydown locks in a lower rate for the life of the loan. Right now, Trevor is seeing more buyers opt for permanent buydowns. In terms of cost, a 2-1 temporary buydown is actually more expensive upfront than a one-point permanent buydown, so it's not always the obvious choice. One key distinction: a temporary buydown can only be paid for by the seller, while a permanent buydown can be paid by either the buyer or the seller.

Are sellers actually open to offering credits for this?

More often than you might think. Trevor says that when buyers receive a closing cost credit, it's almost always being put toward a rate buydown to improve the monthly payment. Sellers are generally receptive to offering credits, especially when the overall offer is strong—good price, solid terms, and a high likelihood of closing. In today's market, pairing a seller credit with a rate buydown has become a very common strategy to help address affordability.

The Bottom Line

Getting pre-approved—really pre-approved, not just pre-qualified—is one of the most important steps you can take before starting your home search. And understanding tools like points buydowns can help you think more strategically about your financing, especially when there's room to negotiate with a seller.

If you have questions or want to connect with Trevor directly, feel free to reach out to him. And as always, I'm here to help you navigate the buying process from start to finish.

Thanks for reading!

Ashley