To Prequalify or Not to Prequalify? Soon you’ll have no choice!

home-buyers1The home buying process begins in different ways for different people. My last home buying process began with an archery lesson. I’d been growing increasingly concerned about the Pecos Road freeway project, from which we lived just a quarter of a mile north. No real discussion or plan had taken place when my family and I drove out to Paseo Vista Park in South Chandler to take an archery class through the City of Chandler. Following the lesson (during which I did VERY well I might add), we drove through Fulton Ranch to meet friends for breakfast. And we fell in love. We hadn’t really spent much time in that part of Chandler, and as we visited subdivisions in and around Ocotillo, we started talking in earnest about putting our Ahwatukee home on the market and becoming Chandler residents. We had lots of options for what our next steps would be: Contact our Realtor at the time (I was yet to be licensed); start getting our home ready for sale; start looking for properties in the area in which we wanted to be; contact a lender to find out how much home we could afford. Then, and now, looking for a home did not require that we be prequalified for a home loan. However all of that is about to change!

For a long time I have advised my clients to develop a relationship with a lender they trust, and to provide all of the information they can in order to get prequalified PRIOR to shopping for a home. First, it’s more efficient and less emotionally taxing to know exactly what you can afford and to work within those parameters while looking at potential homes. Second, when making an offer on a home you desire, a pre-qualification letter helps to build a strong case for your offer, showing that you’ve already done the work necessary to be sure you can afford and qualify for the loan. Sellers want as much reassurance as possible that you will get to the closing table. The pre qualification letter shows everyone you deal with in the process that you are a Serious Buyer!

Beginning sometime during the last quarter of 2015, the newly released purchase contract will require that a pre qualification letter accompany all offers. It will no longer be the choice of the buyer as long as they are relying on financing to purchase the home. As a result, it will be even more important that you locate a lender that you trust to help with the pre qualification process. If you don’t know a lender, your Realtor can assist you by providing several loan officers you can interview to find the best fit for you. This is a person with whom you will be sharing a lot of personal financial information. This is a person who will be an integral part of your home buying team, and will be coordinating with your Realtor and your title agent in meeting all of the terms of the purchase contract.

If you’re thinking of buying a home in the next few months and haven’t spoken to a lender, now is the time to do so.  If you need a referral, ask me and I’ll make sure you get hooked up with the professional who can get you to your goal.

Trackbacks

  1. […] make good decisions about whether the time is right to purchase a home. I encourage them to sit down with a lender prior to getting heavily involved in the home search process, to find out how ready they are to […]

  2. […] And experience is key to getting to the closing table. There is so much that can go wrong between getting pre-qualified by a lender and getting handed the keys to a new home. A lender who is inexperienced has a much greater […]

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