Is it Time to Call a Realtor? [First time home buyers]
Maybe you’ve spent the last 6 months clearing up your credit (or longer—no shame!) and paying your bills on time for several years. You’ve been at your job for two years, filed income taxes for two years and you’re confident that home purchase is in your future. You’ve decided to take the plunge into home searching, or at least take a serious look at what’s out there before moving ahead. How do you start? You might be wondering, Can’t I just call a realtor and start looking at homes?
Not quite yet.
Do I have to prequalify just to see what’s out there ?
Remember that buying and selling homes is how a realtor makes a living. That said, they can’t show each home to every curious Looky Lou who, for some is just being nosy about the neighbor’s home, or the behemoth mansion that sits on top of the hill. Showing a property is an investment of time, one that the realtor wants to turn into a sale with a serious and qualified buyer. A letter of prequalification from your local mortgage broker or lender gets you facetime with a Realtor.
Can I look at properties without a letter of prequalification
?
There may be a number of reasons why you haven’t taken the plunge to prequalify (protecting your credit? We get it!) but, you’re still curious about homes in your area? You may scour Zillow, Trulia and Realtor.com online to find Open House listings. These allow you, the general public, to peruse the property, without prequalifying. You may even make an offer, but know that without that all important letter, your bid may not be taken seriously. If you make an offer without being preapproved, in all likelihood, you will lose out on the sale.
Can I talk to a realtor before I prequalification?
In our climate of instant gratification, it may feel a little off-putting to be told you can’t go just anywhere or look at any house you want. Most realtors will automatically conclude that you’re not a serious buyer without the letter of prequalification. They will likely steer the conversation toward getting prequalified with their favorite lender. You can save a little time and aggravation getting a pre-qual letter from a trusted mortgage broker, or your bank. Ohio Capital Mortgage makes this process simple by having their secure loan applications
available online.
What’s the purpose of a pre-qualifying?
With a letter of prequalification, your Realtor is able to streamline the search and help you find a home meeting certain criteria in your price range. Have a clearly defined list of your wants, must–haves and your chosen neighborhoods.
The letter of prequalification is your backstage pass, your ticket in to homes at your level of purchasing power. It means you’re willing to take solid steps toward home purchase. You have invested in the process. A wise realtor will invest in you as much as you invest in the process.
Understand that prequalification is not the same as preapproval and the terminology is not interchangeable. The vast majority of lenders do not run credit for a prequalification. Preapproval means that you have allowed a lender to verify your financial assets and information, including a hard pull on your credit.
Does a mortgage prequalification affect my credit?
It depends on how often you apply and whether your lender or broker checks credit reports. Ask them what standard procedure is for your lender as office vary on this point. One source claims that all inquiries within a 14 day span count as one inquiry and appears as an inquiry.
Will a hard pull damage my credit?
During the application stage, rate shopping is common, as well as prequalifying with multiple lenders. Not only normal, but necessary when you’re talking about a payment you’re making for 10 to 30 years. Credit pulls for a home are necessary and legit. It can affect your score a few points or more and for up to 90 days (or longer).
Keep in mind all recent major purchases and new lines of credit which can also lower your score.
If you’re rate shopping, you want to make sure potential creditors pull credit within days of each other, not weeks or months, to minimize damage. Additionally, be as ready as you can be to begin your home search. Pre approval and prequalification have a time stamp of 60-90 days and should it expire, you’ll need to start again verifying financials.
Have questions about properties? To appease your curiosity: where to find property info in central Ohio for free: Franklin County Auditor
Ready to get started? Call our office at 614-891-9000. Ready to make the leap? Visit our secure application page.
Local Partner.
Unlimited Results.
Quick Links
Columbus Office
107 Commerce Park Drive, Suite B
Westerville, Ohio 43082
P: 614.891.9000
C: 614.580.9755
F: 614.474.5635