I have been getting a lot of calls lately from prospective buyers that want to look at homes. One of the 1st questions I ask them is, “Will you be financing the purchase or will you be paying cash for the home?” If their reply is they intend to finance the home, my next question is “Have you spoken with a lender, do you know if you are qualified, if so, what you are qualified for?” Most of them reply, “No, not yet, I just want to look and see what’s out there, then I will talk to someone about a loan.” Then they follow up with, “Is this necessary to do before I find the home I intend to purchase?” The answer is “YES”.
Why is getting qualified the 1st step in the home buying process? There are several reasons but the main one is qualifying for a loan is not as easy as it used to be. The requirements are much stricter than in years past; they are constantly changing, and can vary greatly depending on the type of loan you plan to obtain.
A lender will be able to go over your financial situation with you and tell you if you are qualified. They can go over the different types of loans available to you, how much you will need as a down payment for the type of financing you will be obtaining, and explain the costs associated with that type of loan.
If you have already spoken with a lender and have gotten qualified but it was more than 3 months ago, contact them again to be sure the terms and conditions are the same and that you still meet the qualifications for that type of financing.
There is nothing worse than finding your “dream home”, getting your hopes up, then finding out that you can not or may no longer qualify for a loan.
It is also important to keep in mind that in Arizona in order to submit a Purchase Contract for a property, in MUST be submitted with either Proof of Funds if the buyer is paying cash, or a Loan Status Report (LSR) if the buyer intends to use financing. Your offer will not be considered without it.
Don’t have a lender? Contact me and I can provide you with a list of lenders I have worked with and recommend.
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