Your Finances are Private, Your Agent Doesn’t Need the Details
I’m a firm believer in the importance of home buyers getting pre-qualified for a mortgage. The main reason is that YOUR personal finances are very private and none of my business. When you select a lender, you discuss your private information about your income, your expenses, your budget etc. This determines the price range for you to begin your home search. When you know the best price range for your budget, it helps US do an even better job of find you the right home! Here’s a great article shared on the RE/MAX network.
If you’re concerned about detailing your finances to your real estate agent, rest assured that there’s plenty of privacy in the client/agent relationship.
Real estate agents don’t need, or expect, you to disclose everything about your money to them. That said, they must understand your overall situation to help guide you to a home that’s within your budget.
An agent’s job is to negotiate a home purchase or sale on your behalf, keep the transaction on track and help you navigate real estate paperwork. His or her strength lies in understanding home values, and property and neighborhood features. Home financing is an altogether separate story from a home search or sale; therefore, agents usually don’t delve into your finances to crunch the numbers.
Leave it to the lender.
Agents are happy to let your mortgage lender handle the financial questioning. A loan officer at a bank or mortgage company calculates your maximum purchasing power and your monthly payments based on your loan application, financial documentation and debt-to-income ratio.
Be prepared to supply your lender with your last two years of tax returns, recent pay stubs, bank statements and investment accounts. Agents then present a lender-generated preapproval letter to listing agents, indicating the amount you’re able to borrow.
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