Why Get Pre-Qualified?
With acute shortages of homes for sale in so many markets throughout the nation, getting a preapproval for a home loan is more important than ever. With a lender lined up and a preapproval letter in your pocket, sellers know you’re serious.
Getting pre-qualified involves supplying a bank or lender with your overall financial picture, including your debt, income, and assets. The lender reviews everything and gives you an estimate of how much you can expect to borrow.
Pre-qualification can be done over the phone or online, and there’s usually no cost involved. It’s quick, usually taking just one to three days to get a pre-qualification letter. Keep in mind that loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. It’s based solely on the information you hand over to the lender, so it doesn't mean much at all if you don't provide accurate data.
The initial pre-qualification step allows you to discuss with your lender any goals or needs you might have regarding your mortgage. Your lender can explain your various mortgage options and recommend the type that might be best suited to your situation.
Your pre-qualified amount isn't a sure thing because it’s based only on the information you've provided. It's just the amount for which you might expect to be approved. A pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer, who has been more thoroughly investigated.