Yes, as a buyer activity looking to purchase a home you should have a Mortgage Pre-Qualification letter ready before you enter that first address in your GPS to see.
I put together a few key points to consider why it is important to obtain your mortgage pre-qualification FIRST.
Point #1: Both you and your Realtor will have a clear understanding of your goal price range for a home purchase and will be confident that you will be able to obtain mortgage commitment (or mortgage approval) once you find that home.
Point #2: Your Realtor will show you properties in the price range you were qualified to purchase. You won’t be shown homes that you won’t be able to afford and thus won’t go through a “grieving” process when you realize you won’t be able to afford paying for an-over-your-budget home and everything else you want to do to enjoy your life.
Point #3: When you submit your offer to a seller and you have included your pre-qualification letter, that seller will know they have a serious buyer who has taken the time to get qualified for mortgage financing ahead of time. It will ease their mind when negotiating and accepting your offer to purchase.
Point #4: Your transaction is more likely to result in a closing. Not knowing what you are qualified for, not crunching the numbers ahead of time, and simply rushing out and putting offers on homes you are not certain you can ultimately afford can jeopardize the closing from ever happening. When you get pre-qualified you will go over taxes, home owner’s insurance costs, escrows and in some cases if it is a condo or a planned area development, addition fees called Home Owners Associations fees. Those are key to understand when getting prequalified as they can lower your purchasing dollar for a home or condo.
When getting pre-qualified there are many factors and discussions you will have with your Realtor and mortgage professional that will help you find and purchase your next home.