by Andrea K Eldert, Senior Mortgage Underwriter
In recent years, potential home-buyers have turned increasingly to pre-qualification for a mortgage as a first step in the home-buying process. If you aren’t familiar with this practice, it may seem like becoming pre-qualified just adds an extra step. Is it really worthwhile to get pre-qualified? What are the advantages of doing so? We would say that there is value in getting pre-qualified for your mortgage before you start shopping for a home because it can make your search easier, less time-consuming, and might even save you some money. Here’s why.
Being pre-qualified makes you a smarter consumer. Once you are pre-qualified, you will have a good idea of how much you can afford to spend on a house. Rather than wasting time looking at houses that are out of your price range, you can start searching right away for houses that are a good financial fit. In other words, you can save yourself some time by only looking at houses that fit your budget.
Being pre-qualified makes you a better negotiator. Pre-qualification not only gives you helpful information to narrow your home search, but it also tells the seller something about you. It lets them know that there is less chance of getting further down the road only to have things fall through. Sellers who are confident that the sale will not be halted by surprises during the loan approval process are more likely to negotiate with you and accept your offer.
Being pre-qualified may make the loan approval process shorter and easier. Think of pre-qualification as a way to get the loan approval process started ahead of time. Whatever documentation is provided for pre-qualification will not need to be provided again once you’ve made the offer on your home. Plus you already have a relationship started with the lenders at your bank so you will be able to ask questions as they arise.
So before you contact a realtor, or check out the home ads, or even make a list of all the amenities you’d like your home to have, set the pre-qualification process in motion and get your home search off to a good start.