Should I get a Pre-Qualification Letter before I start house hunting?
Updated: Oct 31, 2018
So the thing is, most agents are too nice.
We will show people homes without asking for a prequalification letter most of the time. Even four, five, ten showings in, but sooner or later, when the time comes to make an offer, you will have to get one.
(Unless of course you are paying cash...)
Typically it makes much more sense to have one right away, before you start seeing properties.
Why? You may ask, well because it is considered "best-practice" to present a pre-qualification letter with an offer to purchase. Having a PQ makes your offer that much stronger. Most people, when presented with otherwise identical offers, will pick the one with proof that the person or people submitting the offer can afford the home.
You don't want to find your perfect house, and then have to take the time to get a PQ because the market is active right now, and in an active market, even a 24 hour (Shoot, even 2 hour) delay in making an offer could mean it's someone else's offer that gets accepted.
To get a pre-qualification letter, you don't need to pick a property first.
Speak with your lender and see how much house you can afford. At this point in the process, an exhaustive detailing of your financials is not required. Most of the time you can get a PQ with a simple phone call. Don't worry, the thorough, fine-tooth comb analysis of your financials comes later.
Once your lender issues the letter, then its time to go house hunting, PQ letter in hand!
(Figuratively speaking of course, you don't actually need it in your hand.)