Why Prequalify for a Home Mortgage Loan?

Click here to Prequalify Online

Do you know how much you can afford to spend on a new home? You will if you complete the home loan prequalification process. The process requires a small investment of time, but it’s an investment that pays off later because you won’t waste time shopping for a home you can’t afford.

Prequalify Online

You can prequalify online, using any of the online prequalification calculators. Or you can prequalify in person by providing a mortgage lender or broker with personal information including your social security number, the amount of your down payment, approximate price of the home you want and its type, and the amount you expect to borrow. Based on a review of this information, the lender makes a determination as to the loan amount for which you would likely qualify.

Because the prequalification step does not include actual verification of income, employment, credit, bank balances and more, the prequalification letter in no way guarantees that you will be approved for a loan. So why go through the trouble of getting pre-approved for a home loan? There are several reasons.

No Cost Prequalification

First, there isn’t usually any cost involved in taking this step. You can work with any lender to prequalify, but are not bound to continue working with this lender once you’re ready to apply for a home loan. Second, it’s a good starting point. Realtors will be more interested in working with you because this step proves you’re motivated to buy. Third, sellers too are more interested in dealing with buyers who have been prequalified. This puts you in a good position to bargain on the purchase price. Finally, you’ve already gathered and submitted much of the information you’ll need to complete your loan application so pre-qualification may facilitate and expedite the loan approval process.

You’ve got nothing to lose and everything to gain by pre-qualifying for a home loan. So what are you waiting for?