Many potential home buyers ask the same question – what is the FIRST thing I should do if I’m looking to buy a house? And, the answer is simple – PRE-QUALIFY!
Pre-Qualifying for a mortgage loan is important because it allows you to:
Know how much home you can afford.
Many buyers think they’re “just looking”, and then they find their dream home. That is, they’ve found the dream home they can’t afford. When you pre-qualify you have an understanding of the price range you can afford. This helps you narrow down your search and prevents those upsetting disappointments.
Know which loans you qualify for.
Not all loans are created equal — which is great for the buyer, because not every situation is the same. Talking with a mortgage lender can help you understand the unique aspects of your financial situation, tailoring the loan to YOU and again helping you narrow your search for homes.
Resolve unforeseen issues up front.
This is extremely helpful! Credit report errors are much better dealt with before you make an offer on a home. Having your loan fall through at the last minute isn’t pleasant for you or the seller. You may find out that you need to put more money down due to the type of loan you need. Having time to determine where those funds need to come from greatly reduces the stress of the home buying process.
Know the process.
When you begin working with your mortgage lender before you find a home, you have an idea up front of what the process entails. You’re already prepared for the next and can ask questions up front that concern you or confuse you. Mortgage lenders are happy to answer any questions you have concerning the loan process or the types of loans that will be best suited to you and your finances.
Gain the competitive edge.
When you are pre-qualified for a loan, sellers tend to take you more seriously and handle negotiations differently than if you’re no pre-qualified. This is because they can feel much more confident that your loan will go through without any trouble. Your leverage ability is much stronger in this case. In the event of a bidding war, the pre-qualified bidder always get the edge!
Now you understand why pre-qualifying is so important, but do you know how to do it? It’s really simple! You just need to schedule an appointment with your mortgage lender. When you meet, you’ll discuss verbally some basics of your financial situation (such as income and outstanding debt). The lender provides you with a free estimate of your borrowing power based off of this information. Some lenders may run a credit check, but this isn’t true across the board.
If you’re planning on looking at homes soon, consider getting pre-qualified for your loan. It’s free. It’s easy. And, it will help you determine what kind of loan will help you finance the home that you can comfortable afford. To find a First South Bank Mortgage Lender in your area, check out our lender directory.