I can’t stress the importance of pre-qualifying up front – before you make an appointment to tour homes with your Realtor. No buyer is exactly alike, your situation may have changed from the last time you purchased, loan programs may have changed since the last time you spoke with a lender. There are so many ‘What-if’s?’ and uncertainties in the world of mortgages right now – it has never been more important to develop a close relationship with your loan officer. They will have to know your entire life story by the time you close on your loan.
In the beginning stages of pre-qualification, your loan officer will help you choose which loan type is right for you. They’ll also give you a broad estimate of the costs associated with each loan, the down payments required, the property condition restrictions, and the estimated length of time it will take to process the loan. All of these are incredibly important for your Realtor to know when choosing which properties to take you to. These things will also help your Realtor structure certain terms of the contract when writing the offer to purchase a property you’re interested in.
It is absolutely imperative to know these terms up front. The Arizona Purchase Contract states that the buyer may change the type of financing they will be using to purchase the home only if it doesn’t adversely affect the buyer’s ability to qualify for the loan, increase the seller’s closing costs, or delay the close of escrow. If these conditions don’t apply – the buyer must still notify the seller within writing immediately of any changes in the loan program, the terms, or the lender the buyer is choosing to work with.
If any of the conditions do apply, notify the seller immediately and negotiate with them to work around the issue. If the change incurs more expenses for the seller, be prepared to stick with your original choice. Most sellers will not renegotiate closing cost contributions after the contract has been executed.
Be sure to do your homework before making an offer on a property. Ask your lender for an estimate of your loan costs as well as any additional up costs that could be incurred as a result of the specific type of loan you’re choosing to use and ask if there are other options you should consider – and most importantly pre-qualify!