How will being pre-qualified help my home search?

Today, most consumers start their home search online. It is important to know the advantages of being a pre-qualified buyer. There are several reasons that this will help you. First and foremost that this is free service that will help you find out the max range of homes you can look at but it also will let you know monthly payments that you can expect. Through this process you should also be advised on what finance options are available to you as a pre-qualified buyer.

1) Narrows Your Search: Getting pre-qualified before looking for a home will help narrow your search and make house hunting more efficient. During the pre-qualification process, your credit, income and assets will be analyzed to determine if you are worthy of buying a home and making mortgage payments on time. Home buyers will also find out how much they can afford, what their average house payments will cost, how much of a down payment they should make and other helpful details. Knowing this valuable information before house hunting will ensure that you only look at homes you can afford and your lender thinks you’re qualified for.

2) Helps You Strike While the Iron’s Hot: Getting pre-qualified for a home loan is the most efficient and speedy way to search for a home and strike while the iron’s hot. Pre-qualified home buyers will go through fewer verification steps because they have already received a lender’s approval during their pre-qualification process. Also, you will already know what your optimal price range is and be able to scout out good deals that fit the bill.

3) Gives You More Negotiating Power: Pre-qualified home buyers have taken the necessary steps to get a lender’s approval and show that they are financially worthy of buying a house. Being pre-qualified before your search will give you more negotiating power when you’re ready to buy. Sellers may be more willing to accept your offer and negotiate the price because you’re pre-qualified and are deemed financially responsible to take on a mortgage. When you plan ahead, you have more leeway for negotiating and being persistent in your approach.

4) Speeds Up the Closing Period: Once you’re pre-qualified and you’ve found the home you want to buy, you’ll be able to close the deal in less time than non-qualified house hunters. Pre-qualification helps speed up the closing period since there is less time spent verifying your credit and income because that information has already been established. Unless you are already pre-approved, you’ll have to wait for a lender’s verification and your loan application to be processed. The closing period typically takes 30 days to complete, but with this first step out of the way it could be shortened to a couple weeks.

5) Helps you Get Approved Faster: Once you get pre-qualified for a home loan, you are ready to get pre-approved. Getting pre-approved means that you meet the credit and financial requirements for the home loan, have been verified by a lender and qualify for the mortgage. If you’ve already had a lender determine your worthiness of a home loan, you’ll experience less hassle getting pre-approved. Getting pre-approved will help you determine a more definite sales price range and get your file underwritten to make sure you qualify for the mortgage. You’ll also find out what loan programs are best for you, and what you need to do to get qualified if you weren’t pre-approved.

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