Arguably, the first step to purchasing a home is to call a Realtor.  However, one of the first set of questions any good Realtor will ask?  “Are you prequalified with a mortgage lender?”.  Of course, we know there are a lot of cash buyers out there, still your Realtor will expect to see some form of Proof of Funds (POF) before moving ahead with the process.  Do not be offended by this, just know that your Realtor is looking out for your best interest.  Without a prequalified letter, your Realtor will be clueless as to how much house you can afford and will not know where to start.

 A lot of times, you the buyer does not know your financial limitations until you have a discussion with a mortgage lender.  There are a lot of variables that goes into the mortgage qualifying process, but fortunately these days most lenders will be able to qualify you after one phone call.  The prequalified letter gives an estimate of the amount you can borrow.   It is one of the most important steps in the home buying process. 

You may know all the features you and your family want in a home.  Afterall, who does not have a dream home idea?  But like just about everything else, price matters.  Here are some advantages of talking to a lender and getting prequalified:

  1. You will have a realistic idea of what you can afford.
    • The lender will inform you of any new mortgage programs and calculates other items you may not have thought about such as, property taxes, homeowner’s insurance etc.  You will also get an estimate of the amount of money you need to bring to the closing, thus avoiding “sticker shock” when the time comes.
  2. Your Realtor will be able to narrow the search and as a result saves a lot of time.
    • Various individual’s time will be wasted if you are touring homes that are not in your price range. This includes not just your time but your Realtors time and depending on the situation the seller’s time.  If the home is occupied, the seller must make adjustment for showing appointments.  Not to mention the fact that another person could have had that time slot that you occupied.
  3. Everyone involve will know that you are serious and ready to move forward.
    • Currently, we are in a seller’s market. As a buyer, you have a lot of competition for the same home.  When you are prequalified, you have a stronger negotiating power.  Regardless of how much your offer is, sellers are usually thinking “show me the money”.  Sellers do not want to risk being “in-contract”, having their home off the market, missing out on other offers only to find out you are not qualified to make the purchase.

If you are asking the question: Should I get prequalified for a mortgage?  Yes you should!  If you are not already working with a mortgage lender, your Realtor will be able to refer you to qualified lenders.  With a good Realtor, you are always in “good hands”.  Here is a short video on the mortgage qualifying process.

 

Written by Sanncha Kiss – Realtor in Lehigh Acres FL 

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