Why Prequalify?

I get this question on an almost daily basis.

"We are just looking right now and we really don't think we need to get prequalified."

So, when the Doctor tells you to fast before an operation you don't listen to him either, huh?

One popular misstep in the home buying process is looking at property before you are qualified with a lender to make that purchase.

"Why" you say?

The reasons are simple but very important.

- You will know the exact amount for which you can qualify. This allows you to view properties that you are certain fit within your budget. Wouldn't it be heart breaking to find your dream home only to find that it's several $1,000's or $10,000's out of your reach. And, no, depending on the situation you probably can't just "offer them less" and expect to get the house.

- Your approximate monthly payment will be set do you can figure into your budget. Yeah, we can qualify for a mortgage all day long but does it fit within your personal budget? There are some payments that lenders don't take into consideration when qualifying and it's up to the consumer to make sure that their personal budget will work with the new payment and added costs homeownership brings.

- You will receive closing cost and down payment figures. Again, how can you navigate a transaction without this stuff??

- You and your lender can select the best loan program for your particular situation. Are you a first time buyer, a teacher, or maybe a firefighter? There are different programs out there that certain people can qualify for that might allow you to get more home for your money. Wouldn't you like to know this stuff upfront?

- You may have some bumps and bruises on your credit or in other parts of your finances. A lender will compile all of the info and will advise you of any clean up that you need to do in order to make your situation better. In most cases this will save you money on your mortgage and may allow you to buy more home for your money.

- The property that you are able to purchase depends on your financing. For instance, if you are using FHA financing there are certain home conditions that will prevent the lender from mortgaging that home. Isn't it a good idea to know these things up front?

- Lastly, here in Arizona, seller and listing agents require proof of prequalification or an LSR to be submitted with the initial offer and will not look at an offer without it.

The goal here is to create the most efficient and effective plan while home shopping and while navigating the transaction. Doesn't it make sense to get prequalified before shopping for a home?