UNDERSTANDING THE ARIZONA PRE-QUALIFICATION FORM:
For quite some time, the Arizona Real Estate market has required a prospective homebuyers to provide a state specific document from their Arizona Mortgage Lender to “prove” that they are pre-approved for a mortgage. The evolution of this document has been the subject of much debate. The latest and greatest version of this powerful document is called a “Pre-Qualification Form.” You can take a peak at what this document looks like here – Arizona’s Pre-Qualification Form. Whether you are buying in Chandler, Mesa, Gilbert, Tempe, Scottsdale, Sun Lakes, Queen Creek, Avondale, Glendale, Tucson, San Tan, Ocotillo, Phoenix or any other city in Arizona you will need a copy of this document before submitting an offer on a home.
This document is completed by a buyer’s mortgage lender and is submtted by the buyer’s agent with the Arizona Residential Real Estate Contract when an offer is made to purchase a home. The document is not property specific and does not include a property address. The Pre-Qualification Form does outline some very vital and specific information relative to a buyer’s home loan approval status including:
1. The buyer’s marital status
2. Whether or not a buyer is relying on the sale of another property to qualify for the new mortgage
3. Whether or not a buyer is relying on the seller to pay their closing costs
4. What type of mortgage the buyer is approved for
5. They type of property the buyer is purchasing/qualified for
6. How the buyer will occupy the home - as a primary residence, second home or investment property
7. The loan amount, the monthly payment and the interest rate the buyer is qualified for
8. The amount of income, asset and credit documentation the lender has gathered from the buyer
Sellers (on regular sales, short sales and foreclosures) put great emphasis and value on the Pre-Qualification Form. Without one, a buyer does not stand much of a chance of having their offer considered (unless it is a cash offer in which case proof of funds is typically required).
While the latest and greatest version of Arizona’s pre-approval form is a marked improvement from past versions, I would not be surprised to see more changes in the years to come! All in all, the current Pre-Qualification Form does a great job of conveying the viability of a buyer and their mortgage pre-approval to a seller.