Throughout the home or land buying process, there are many necessary steps. One of these is getting pre-qualified for a mortgage. This step may seem like a tedious detail, but it’s one of the essential parts of the process because it sets you up to buy a home quickly and with less hassle.
In this article, we’re going to take a closer look at why getting pre-qualified is so crucial and how you can do it quickly.
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What is pre-qualification?
Pre-qualification is the process of determining how much borrow money through the app you can borrow from a lender. This is done by providing the lender with basic information about your income, assets, and debts. The lender will then give you a pre-qualification letter showing how much you are approved to borrow.
The pre-qualification process is vital because it helps you focus on homes within your budget. It also puts you in a better position to negotiate a lower purchase price as you stand out from those without a pre-qualification. And best of all, it’s free and quick to do.
The process of getting pre-qualified.
The first step to getting pre-qualified is to reach out to a reputable home lender. They’ll be able to answer any questions you have, and they thoroughly understand the process.
The lender will then ask you for basic information about your income, assets, and debts. Their goal is to determine how much you can afford to borrow from them based on what you own or earn. Once they have the needed information, they will pre-qualify you for a loan amount.
The lender should provide you with an answer in about an hour. Based on your information, they will issue you a letter explaining the amount of borrow money online they are willing to loan you.
After receiving your pre-qualification letter, it’s time to start house hunting!
What happens after you’re pre-qualified.
Once you’re pre-qualified, you’ll get a letter stating how much you can borrow. You’re all set to find the home of your dreams. You’ll be able to narrow down homes within your price range based on what the lender said you could borrow.
When you find the home of your dreams, and you’re ready to put in an offer, your real estate agent will ask you for the pre-qualification letter as they’ll include it with the contract.
This letter is crucial as it’ll tell the seller that you’re serious about buying the home, and a lender is already willing to provide the funds based on the information you provided.
The benefits of being pre-qualified.
Having an approved amount you can spend has its advantages.
With a pre-qualification, know precisely how much you can spend. This allows you to narrow down the homes you’re interested in.
For example, let’s say you’re not pre-qualified for a home loan. You don’t know for sure how much you can afford, but you continue to look at homes around $500,000. Then you find the perfect home. It’s beautiful and is ideal for your family. You put a bid on the house, and it’s accepted. Congratulations! However, when you go to the lender, you find out you’re only qualified for $400,000. Now you’re starting all over again.
You can avoid this scenario if you’re pre-qualified. Being pre-qualified tells the sellers that you have money standing by for their home. It also shows your real estate agent that you are serious about buying the house and are not wasting everyone’s time.
Ready to buy your dream home?
Pre-qualification is an essential step in the home buying process because it shows that you are serious about buying a home and have the financial resources to do so. It also puts you in a better position to negotiate a lower purchase price.
So why wait? Get pre-qualified today. It takes only a few minutes and will set you on the path to homeownership.
