Vickie Perry
One short answer: ABSOLUTELY! Getting pre-qualified is the first step to the home buying process. There are several reasons this step should not be overlooked, but reason #1 is to avoid disappointment. The old phrase “champagne wishes on a beer budget” applies. I have had homebuyers come in my office on Monday morning excited about finding the home of their dreams over the weekend only to find out the home is priced a little higher than they can afford. Don’t let this disappointment happen to you.
The pre-qualification process is quite easy and informative. Your first step is to call a licensed lender to schedule an appointment. I prefer to meet face to face with my clients to discuss their goals and desires. Doing so allows us to develop a plan specifically tailored to my client’s needs. We will review current income, as well as the current debt load. Also key is determining how much money has been saved to purchase a new home. A borrower who hasn’t saved any money might still qualify for a home loan, so it doesn’t hurt to make the call. There are several down payment assistance programs available for qualified borrowers. It is important to work with a lender who is knowledgeable about these options.
The loan process is all about paperwork. The more thorough you are with providing your paperwork, the more thorough the pre-qualification process can be. For a quick pre-qualification a paycheck stub and credit report is all that is needed, however, to avoid potential roadblocks in the future, I prefer getting everything up-front. This includes paycheck stubs, tax returns, W-2s, bank statements, credit history, and any additional documentation that might have impact on a successful loan approval.
I tell my clients…”When you leave my office you will know what price range you can shop in, how much money you will need up-front, and how much the home will cost you each month thereafter.” Once pre-qualified, you will be armed with the information needed to successfully find a home in your price range. When you find a home that catches your eye, you will be in a much better position to make an offer than someone who hasn’t taken the steps to become pre-qualified. And to the home seller, they won’t have to worry if they are wasting their time considering your offer.
You are pre-qualified, what now? I suggest meeting with a reputable real estate agent. One of the main questions they will ask is if you have met with a lender about pre-qualifying. You can discuss the price range you are comfortable shopping in based on the information obtained from your lender. This will help you and your real estate agent select homes suited for your financial needs. When you find the right home and decide to make an offer, your real estate agent will obtain a Letter of Pre-Qualification from your lender. The letter will be given to the seller along with your offer. To them, working with a pre-qualified borrower is like working with someone who has a suitcase full of cash. Ok, it might not be quite that feeling, but it does give a sense of relief.
Article by Vickie Perry (#AK195996 / #AK167729) is Branch Manager of Residential Mortgage, LLC, in Juneau. She can be reached at (907) 789-2329. Visit her website at www.vickieperry.com.