Why Pre-Qualification is a Game Changer For Homebuyers
If you’re planning to buy a home this year, you might have heard that loan pre-qualification is a necessary step to take before starting out on your journey. But why is that? And is it still important in today’s shifting market?
The truth is, getting prequalified with a lender is critical, and when it comes to your home search, it can be a game changer in so many ways.
When you prequalify for a home loan, you’re getting an estimate of what you might be able to borrow based on the information you provide about your finances, as well as a credit check. It's also an opportunity to learn about different mortgage options and work with your lender to identify the right fit for your needs and goals. The next step is receiving a pre-approval letter, which is an offer from a lender (but not a commitment) to lend you a specific amount, good for 90 days.
Getting prequalified and then receiving a pre-approval letter from a lender lets the seller know you’re qualified to buy their house. Paul Centopani, Editor for the Mortgage Reports, explains:
“. . . most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your preapproval teed up as soon as you’re serious about bidding on a home you like.”
Every advantage you can gain as a buyer is crucial in a market that’s constantly changing. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals, such as a real estate advisor and trusted lender, on your side. They’ll help make sure you’re ready to put your best foot forward.
Getting pre-qualified and then pre-approved for a mortgage helps you better understand what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional so you have the tools you need to succeed as a homebuyer in today’s shifting market.