The First Question a Real Estate Agent Should Ask
“Have you been pre-approved for a mortgage?”
If this is not among the first questions that your real estate agent asks you, find a new one. Pre-approval (or at least pre-qualification) is an important part of the home buying process, and it normally is the first thing you should do after deciding to buy a house. If you start house hunting before being pre-approved or pre-qualified for a mortgage, then you really have no idea what you can afford. You could wind up spending all your time looking at homes that are out of your price range. An agent that does not insist that you be pre-qualified or pre-approved before beginning your search for a home is either inexperienced or ineffective, and your search will not yield satisfactory results.
Pre-approval and pre-qualification are often used interchangeably, though there are some important differences. Both are intended to help you figure out how large a mortgage you can afford. A mortgage lender will ask you a series of questions about your income, assets and debt in order to get a picture of your financial situation. Using your answers, as well as your credit score, the lender will tell you how much you can afford, your interest rate and what your monthly payment is likely to be. But, this is where the similarity between pre-approval and pre-qualification ends.
To be pre-qualified, the lender takes your answers at face value; he assumes that you have been honest. For a mortgage pre-approval, though, the mortgage lender will verify your claims. He will call the banks where you have accounts and verify your income with your employer. Either approach is acceptable, though, pre-approvals are preferred because they are more reliable, as all your claims will have been verified.
Pre-approvals and pre-qualifications are the only way that you can know how much house you can afford (unless you plan to pay cash for the whole house). Without this step, the real estate agent is forced to lead you blindly. When it is time for you to get approved for a mortgage, you may be surprised at the amount for which you are approved. In the extreme, you may have to start your search for a new home from scratch.
Use this as a way to screen potential real estate agents. If an agent does not ask in your first meeting if you have been pre-approved, keep looking. There are better agents out there!
2 Comments:
Thank You, Thank You, Thank You. For putting it out there. So many agents are not asking their clients to get pre approved before they spend hours, days or even weeks finding them the perfect home.
Ginny Theriot
Keller Williams
North West Houston
Ginny,
Thank you. It is very important for this. So many people ended up wasting time, both the agent and buyer. As you may see from our website, we are a nationwide mortgage company with an awesome structure. Will be happy to pre-approved clients for you. Email me at ourmilla@aol.com for more info.
Ourmilla Sharma
Bestrateforbuyers.com
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