Pre-approved for a home mortgage? Think again!

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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.