Before you begin the process of finding a new home it is important to obtain a pre-qualification (PQ) letter. A large portion of new home buyers do not understand the importance of completing the PQ. Educating new clients on the importance of this step should be started by the referring Realtor. There are a number of reasons to obtain the pre-qualification letter upfront.
- Displays your commitment to Realtors and Home Sellers
Getting your financial position in order shows Realtors you are committed to purchasing a new home. It also communicates to your Realtor a general time line on when your looking to purchase.
Having a PQ letter also conveys to sellers you are serious about purchasing a home. At competitive price points this is valuable as you could be competing with several other potential buyers. The PQ letter also gives you the upper hand when negotiating with a seller. Having PQ will make you more attractive to sellers because you have take the time to speak to a lender. This can be the deciding factor when a seller weighs two options.
- Helps determine your price point.
At Academy Mortgage Mesa we collect items such as paystubs, w2s, tax returns, and asset information before issuing a PQ. We also pull your credit (with your permission) so that there are no surprises from the start of the loan process. This gives you a better understanding of payments for various purchase points.
Understanding your purchasing limit up front will prevent unnecessary trips to view homes you cannot afford. A PQ also will give you a better understanding of all the costs associated with purchasing a new home.
Finding the perfect home is a daunting task but with the right tools and knowledge can be a great experience. Pleae feel free to contact me with any additional questions.