Why do all Real Estate Agents keep telling me to get pre-qualified?
So, you’re ready to buy a home, you’ve been looking online for months. You know you want to live in Roseburg, Oregon. You’re unsure of which neighborhood you want to focus in on, but you don’t want to get a Realtor involved yet. They’re just going to tell me to go see a lender so they can figure out what my max budget is, right? You’re not ready for that kind of pressure, you know what you want, you can look up a loan calculator and figure out the payments, yep I can pay that amount a month. You’ll do your own search and when you find that perfect home, you’ll call the Realtor, swoop in and buy that hot new listing right? WRONG.
We experience this frequently as Realtors. Let’s dive in and explore the reason why your Realtor is asking you to get a pre-qual from your lender first. One of the most important reasons to get pre-qualified is to find out what loan type fits your current financial picture. You may ask yourself, what’s the difference, it’s just a loan, right? Some of the many different loan types are Conventional, VA, FHA, and USDA. Do you know which one of these loans require the most down payment? Or which one doesn’t require a down payment? Do you know which of one of these loans will let you purchase a manufactured home? How about which loans allow you to purchase a fixer-upper, flip or project home?
Interest rates, mortgage insurance, homeowner’s insurance and tax rates also play a role in your overall monthly mortgage payment. Did you know the difference between 4% and 3% interest could be as much as $100 dollars a month on your mortgage payment? The lender you choose will help you navigate all these financial aspects of buying a home.
Which brings us to the next subject, are all lenders the same? Do you know the difference between a Bank, Credit Union, and a Mortgage Broker? What about a national lender vs local lender? Everyone assumes that since you’ve been going to your financial institution for years, they must be the best choice. From our experience, one lender may not be able to lend on a particular property, yet another lender will. They can all vary on their interest rates as well, which affects your buying power. Here at the G Team, we’ve had first-hand experience with many different lenders, and we can refer you to local, experienced lenders that will fit you, and your financial situation.
Still not convinced you need a pre-qual before searching for a home. Let us give you an example of how a pre-qual will benefit you. Let’s supposed that your online home search suddenly pops up with the perfect house in the perfect neighborhood, the one you’ve waiting for! You call the first agent you see on your favorite search site; they cannot get you in the property until late in the day. After viewing, you fall in love with the house. You write an offer contingent on obtaining your pre-approval letter but it’s a hot new listing and it turns into a multiple offer situation. Unfortunately, your offer lacking a pre-approval letter won’t even begin to compete.
Let the G Team guide you through the entire process of buying your next home in Roseburg. Let the experts make sure you are set up for success throughout the home buying process!