Home Loan Pre-Qualification
So you are considering buying a home. Maybe you are already in the market for a home. You could be a first time home buyer or this could be your third home. Maybe this is your dream home, a starter home… or even an investment property. No matter what type of home you are buying, or your experience in the home buying market, getting pre-qualified before you shop is still your best move!
Getting pre-qualified puts you in the driver’s seat. You will know what you can afford to buy, how you plan to buy it, and give you the confidence you need to negotiate your offers. If you plan to use a Real Estate Agent (highly recommended!), most will want to know what you are qualified to buy before they take you out to show a home. Then again, if you are going it alone, you do not want to be guessing on this stuff as you could be taken advantage of.
To get pre-qualified, you need to find a mortgage professional you can trust. You can find a good professional in many ways… the internet, referral, or even the yellow pages. Make sure you find a live person to talk to… internet sites will be very limited in the support and help you can get. When you find a loan officer, ask them how long they have been in the business. You want someone with at least a couple years under their belt. Ask them if they broker loans (broker), or if they only write their own loans (bank). Brokers have access to more loan programs than any one typical bank can offer, and can usually get their mortgage rates below the average retail rate that most banks would charge (less overhead for a broker - no stadiums named after a mortgage broker that I know of!)
For a solid pre-qualification you can count on, your mortgage professional should ask for your current housing history, your employment history and ask questions about your credit. A professional mortgage specialist will do a credit check and even request paystubs and tax documents. They will go beyond asking how much you make and if you have a job. They will look for things that will normally trip a buyer up and cause a deal to die before it can close. A solid pre-qualification should take more than 10 mins. On average, it could take a day or two, depending on how quickly you can get the needed information to your loan officer.
You can always go shopping for a home without getting pre-qualified. But doing so is like going grocery shopping without a list or any idea how much money you can spend. And buying a home is much more important than a trip to the local Food Lion!
So before you start shopping for a home, find out how much you can buy. Unless you can pay cash for the entire home, you will need a mortgage anyway. Make that the right starting point and take control of your home search!
Best of luck,
Ed Nailor