Stock image a family touring a new house with a realtor

How Pre-Qualifying Can Help With The Homebuying Process

By Carl Hamilton, GWB Mortgage Loan Officer

February 08, 2019

By: Carl Hamilton

If you’re in the market for a new home, you may want to consider getting pre-qualified. With a little bit of prep work at the beginning of your search, you will find the process much smoother going forward.

What is a pre-qualification?

This is when a lender looks into your credit, your financial stability, and your ability to pay back the money you intend to borrow. The lender will grant you a pre-qualification letter which means the lender feels you have a high likelihood of being approved for a mortgage loan. In a nutshell, a pre-qualification is a plan. Both you and your lender will know once you actually make an offer (Great Western Bank’s pre-qualification letter is generally good for 60 days but can be extended) what type of loan program you will use, how much money is needed to close, monthly payments, and other important details any buyer would want to know.

Since a pre-qualification plan allows the lender to look into your credit and financials and uncover any concerns that need to be addressed this can be done BEFORE there is ever an offer. If multiple offers exist for one home, the pre-qualified buyer may have the advantage. A lender pulling your credit report and giving you a pre-qualification within 2 minutes and without reviewing your taxes and income documents is NOT doing you a favor. These pre-qualifications can often become denials later because no initial work was done to validate them upfront.

So, consider going through a pre-qualification process well ahead of when you might buy a home. The winter months are a great time to learn about loan programs, interest rates, first time homebuyer programs, and more information about the buying process. Buying a house can feel overwhelming but if you have a proper pre-qualification in place you will be one step ahead. After all, knowledge is power, right?

Learn more information or find an MLO in your area.

 

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