I'm asked quite often by clients, particularly those buying their first home and will be taking advantage of financing, why they should prequalify for a mortgage even before they look at their first potential home. They tell me that where they came from, this was not necessary and even feel it is an invasion of their privacy. I could write volumes on this subject, but I'll try to be succinct.

Prequalification is quite simple and can often be done via fax or over the phone in 15 minutes. The lender gathers information on your assets and liabilities and checks your credit report. And you don't have to obtain your mortgage from the same institution that you received your prequalification from. Among other things, you'll discover during the prequalification process the following:

Your level of comfort.  After gathering your financial information, the lender will discuss with you your level of comfort in terms of monthly payments. Perhaps you qualify for a mortgage in the range of $250,000, but your level of comfort with monthly payments for a home in that range might be more than you are willing to take on, especially when you consider taxes, homeowners insurance, utilities, and other expenses inherent to owning a home. They might also help you explore ways in which you can come up with a bigger down payment and lower those payments.

Available financing products. You may qualify for SONYMA, FHA, adjustable rate mortgage, no money down mortgage (that's another show - don't get me started), conventional mortage, etc. You're making an important investment. You need to be properly educated.

Those unwelcome surprises. I have a client that made arrangements with a credit card company to pay her bills as she traveled abroad, only to find that the company had made some kind of error (and blamed her, of course) and wasn't paying the bills. Another friend found when he started the prequalifying process that he was the victim of identity theft, which took him a year to straighten out before he could qualify for a mortgage at a decent rate. By the way, have you checked your credit reports lately? It's free. Enter "free credit report" in the search engine of your choice.

Avoid wasting your time. Why would you want to spend time looking at houses either out of your range of comfort or homes that are less than you can afford and don't offer the amenities that you want?

Be prepared to make an offer quickly. In the Ithaca area, it is a standard practice to submit the Letter of Prequalification with your purchase offer. It's the beginning of the spring market right now. Let's say it's Friday evening (your bank is closed). I show you THE house. You want to submit an offer. This is a great house and we know that there will be other offers, so you want your offer to be as strong as possible because it is likely that other offers will be submitted this weekend. You didn't get prequalified. Another offer is submitted with a comfort letter. The seller has until Saturday at 5:00 p.m. to make a decision. The offers are identical, but the other buyer has proof they will be able to obtain financing. Guess whose offer will be accepted?

If it were your house... I work primarily as a Buyer's Agent. As such, I owe my full loyalty to my buyer, as well as other fiduciary responsibilities. Often I am finding a new home for my buyer as well as selling their current house. In this case, my client wants me to bring only qualified buyers to view their home. They don't really want to hurriedly pick up clutter, do the dinner dishes, and leave for an hour so their home can be shown to someone who not only is not prequalified to make an offer on their home, but has just always wanted to know what the house looked like on the inside!

This will explain why I insist that the buyers I take out get prequalified before we look at even one house. It just makes sense. Did I say I was going to be succinct?