I Want To Buy A Home, Why Must I See A Lender First

, I bet a lot of people wish they were moneybags and they could just throw around cash at any little thing they wanted without the need of a bank, but sometimes life is just easier when you incorporate people who know these things inside and out. Totally spot on! Love and light, Laura

Good morning Jeff. The lender piece is crucial to the process, if a mortgage will be needed. In many cases, this is the time for the reality check to make sure that the folks can buy now and will end up with an affordable mortgage payment.

Jeff... great post. And I'm still always amazed how much we have to keep repeating this message. I tell buyers I will show them 3 houses before they get approved, but no more until we know exactly what they qualify for (or even that they do!).

If a client isn't pre-approved and they find the home they love, they could lose out - because they need a copy of the pre-approval to accompany the offer, so no pre-approval, no offer.

I couldn't agree more.  This is the first step in the home buying process.  Period.  Thanks for sharing what all buyers should read. 

I love it when an agent shows one of my listings without having the buyer talk to a lender first. 9/10 times said "buyer" couldn't purchase a pack of gum on credit.

Serious buyers understand the need to pre-approve. Serious agents should as well. Go "establish rapport" in another agent's listing...

Jeff, excellent points why a pre-approval letter is a must when wishing to purchase a home.

Pre-approved is a beautiful thing. Knowing you can have the Taj Ma Hal if you like it Mr and Mrs, Ms, Miss Buyer is a good feeling. Not so much fun when you fall in love and nope. Forget that romance with these sticks and bricks because the bank puts the kabosh on the court and spark. A little virus in your debt ratios, a ding or dent or 10 foot pole mark or two on your credit score takes its toll.

What most buyers don't understand is that we are not questionning their "ability" to get pre-approved.  We want to make sure that we are showing them homes that are in the budget of what the buyer wants to pay.  There is no point in showing homes that are out of reach from a comfort level of the buyer.  It is better to discuss options with a lender to determine the best terms and the amount of down payment and closing costs needed.  Then a buyer can decide how much they want to spend based on how much they want to pay from their pocket.  Thank you for sharing.

Jeff, very good information here. Knowing what they can afford saves so much time and frustration for all involved

With all of the guideline changes that seem to take place every day, it is almost always a great idea to have a mortgage professional go over your situation.  With every advantage technically we have today to make that process painless and over the phone, why not get pre-approved?  15 minutes is all it should take to get a good feel for what range of home price is feasible and how prepared the client is to become a serious home buyer prospect.  I recommend it to all my prospects.

Jeff, true - so much in this market where offers are flying all over!

Hi Jeff, When if find someone a little reluctant to get prapproved I usually send them a few videos directly from a lender helping them understand the benefits. ..and in our area most listing agents (myself included) will not take a property off the market for a Buyer without a preapproval. 

I have my buyers get a pre-qualification letter the second time we go look at houses.

If they come in the office, I set down with them, ask about financing. If they tell me they plan to pay in cash I say I need a Proof of funds for when we find that perfect house. If it's a loan I have them get the pre-qualification letter by the second time showing. I understand the frist time, they may not have one. Espicially first time home owners, but if I have done my job of explaining the process then they should have one by the second showing.

This is always a difficult point when dealing with new clients as they don't trust you enough to fill you in on their financial situation. Others may feel that you might give away their position in a negotiation, as some sellers may feel that they should hold firm to a higher price point if they know the buyer is coming with all cash. (They must be rich!)

I make a point to have them talk to one of the mortgage brokers that I trust as this puts another layer between them and myself.