(Written by Bob Ruth)
The first step in buying a home is deciding how much of a payment you can afford. This is usually done with the help of a loan officer who will try to get you pre-qualified for the necessary financing to buy a house. Getting pre-qualified before you go and look at houses is the best option in my opinion for 3 reasons :

1 -  You'll go out knowing how much you can afford which saves time.

2 – You’ll be less likely to look at houses that are beyond your ability to purchase...nothing is worse than falling in love with a house only to find out that you cannot get the financing because it is beyond your means financially.

3 -  The Realtor will be able to negotiate more effectively for you due to the fact that you can tell the seller you have been pre-qualified for the financing to buy their house...and let me tell you, that is a BIG deal to someone selling their house.

And there is a fourth reason to be pre-qualified:  you will be negotiating from a position of strength, or control, not weakness. And that is a major step towards being a home owner. What do I mean by that? Let me explain...If you have no idea whether or not you can get financing for a home, or in what amount, you will not be able to provide a seller with a letter of qualification when you make an offer. The seller wants to see that you are a bona fide buyer, not a tire kicker, so they are conditioned to expect a letter of pre-qualification from a lender when you make the offer. If you do not have one they may not accept the offer, or they may not take your offer while you scramble trying to get pre-qualified someone else may approach them with a better offer for the house, and the key difference may be that they have a pre-qualification letter. That piece of documentation can make the seller seriously consider your offer. Don't play the game backwards. Play the game properly...get pre-qualified, make sure the Realtor has a letter or can be given one the minute they need it to go with your offer. Just last week I had a buyer approach me to get pre-qualified. We spent about 45 minutes together on a conference call, the buyer and his wife who was in New York on business. I was able to pull their credit report and run a couple of scenarios for them that involved a particular house they wanted to buy. When we were done I sent them a letter stating that they had been pre-qualified for a loan to buy the house. Later that morning the agent called me and asked if I could send her a copy of the letter to present with their offer on the house which I did immediately. About an hour and a half later I was contacted by the listing agent who represented the seller. He told me that the offer was going to be accepted ...he said there was another offer in on the property, and that offer was $5000 higher, but those buyers had not been working with a lender and could not produce a pre-qualification letter. The sellers were presented with both offers at the same time. He told me my clients won the negotiation even though their offer was $5000 lower because of the letter. So there you go...get pre-qualified, and get it in writing, before you go looking for a house. It will definitely make a difference.

Robert H. Ruth

Senior Mortgage Banker / NMLS ID: 513243

Phone:         (401) 789-4441

Cell :            (401) 743-4364

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