Many people think “I’ll make an offer on a home and figure out later how I’ll pay for it.” But if you want your offer to be taken seriously and if you want to avoid complications when you close on the home, you must get pre-qualified before you start looking.”
See the image below of the form, below.
Pre-qualification quick but very important as you get ready to make offers. And in this market, where houses are selling in days, you can’t NOT have that pre-qualification form ready.
Why? Because there are 3 people who will benefit from your preapproval: You, your Agent, and the seller from whom you eventually buy a home.
Prequalification serves two primary purposes:
- It demonstrates to both you (and to sellers) how much house you can afford.
- It gives you the purchasing power to make a legitimate offer. (In fact, many financial institutions will not accept an offer on a house without a pre-qualification letter.)
But the benefits continue.
A mortgage loan prequalification is simply an estimate of how much house you can afford and how much money a lender would be willing to loan you. The best time to get a prequalification is right at the beginning of your home buying process, before you even start looking at houses. Realtors also prefer that you have a prequalification letter before they start showing houses so they know the price range you have qualified for.
And, in the event you’re competing with multiple offers on your dream home, most sellers will consider offers with prequalification letters before those without. In this market, that’s extra handy. Last year at this time there were about 6,000 active properties, today their are only about 2,000.
The Prequalification process involves either sitting down with a lender or talking with one on the phone, and providing information on your income, assets, debts, and a potential down payment amount. The lender would then provide you with a ballpark figure in writing of how much he thinks you could afford to pay for a monthly mortgage. There is no cost involved and there is no commitment on either side. This estimate is just helpful in helping you figure out if buying a home is a viable option, and if so, what your price range would probably be.
Or call me for more information about the market: 602-456-9388.