Which comes first, the chicken or the egg? This first-grade level philosophical question, still pondered at dinner parties, applies to the home buying process. Really? That’s right!

Who comes first? The realtor or the mortgage lender?

You have decided, rightfully so, that Santa Fe is the location of your home-to-be. You’re look-ing forward to Santa Fe’s perfect weather, sunsets, food, people, adobe style and magnificent views. In fact, you cannot wait to enjoy those views every day, sitting on the portal of your new home……once you find it!

And so, your journey begins. You must decide who should be the first to represent you on your search. Well, I have an opinion that is shared by most of the home buying industry. The lender should be your first call! Let me stop here to say, this is not a self-promoting opinion. Realtors agree. It just makes sense that you pre-qualify your financial ability prior to your next step, which is choosing your realtor and viewing properties that fit perfectly in your range.

Today’s market is like no other since the early 1970s. Bidding wars are the name of the game.

But, to enter one of these battles you must, at the very least, be prequalified to purchase. Without this preliminary step, you don’t have a chance of winning the war. So, what exactly is involved in prequalification and how does it differ from the more substantial process called preapproval?

When you prequalify for a home loan, you’re getting an estimate of what you might be able to borrow, based on information you provide about your finances and credit history. It is also an opportunity to learn about different mortgage options, neighborhoods and realtors.

Preapproval, on the other hand, is as close as you get to confirming your creditworthiness without having a purchase contract in place. You will complete a mortgage application and the mortgage broker will verify the information you provide. Your credit history will also be checked. If you are preapproved, you will receive a preapproval letter, which is an offer– not a commitment– to lend you a specific amount, and it’s valid for 90 days.

As I stated above, however, with the real estate market being what it is today, most potential home buyers are hurrying to become prequalified, to avoid missing out on bidding for the home of their dreams. Prequalification can take place in few hours, whereas preapproval takes a few days.

Your mortgage broker represents you first, so get the nitty-gritty details out of the way. Then the fun begins! Santa Fe has the best realtors to be found anywhere and the most exciting homes you’ll ever see. Following these recommended steps will ease the process and secure the outcome you want and deserve.

 Jim Gay practiced as a real estate broker for 20 years and has been a consultant to Fortune 500 companies. He is president of The Mortgage Place, Inc., and can be reached at 505-986-9080 and jim@tm-place.com.

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