Are you thinking about buying a home but aren’t quite sure how to begin the process? Getting pre-qualified is the first step in the process of purchasing a home. Before even looking for a home, it’s important to get pre-approved unless you are paying in cash. When you meet with a lender to get pre-qualified, you basically obtain an evaluation that determines whether you qualify for a loan or not. The reason this is a vital first step in the home buying process is that in today’s market, sellers typically expect the buyer to be pre-approved and will usually only negotiate with a buyer who has proof that they can receive financing. Second, you will learn the maximum loan amount that you can borrow. You will also have the opportunity to talk about financing options and budgeting with a lender. Last of all, if there is any problem with your credit, a lender can let you know.
Getting Pre-approved Vs. Getting Pre-qualified
Pre-qualification is the first step in the mortgage process. It’s usually an easy process that you can typically do over the phone or on line through your lender. You might be given a list of information to provide the lender that will be necessary in getting you pre-qualified, such as recent pay stubs, recent tax returns, bank statements, etc. This part of the process helps the lender determine an estimate for you of what you can spend when buying your new home. This gives you a ballpark price you can get an idea of what you can start looking for.
The pre-approval process is when the lender checks your credit score and does a thorough verification on your employment, financial and other important information. This will confirm your ability to purchase a home and lock in the amount you can spend. Once you are pre-approved, you usually have around 90 days to purchase a home.
Once you have begun the pre-qualification process it is a good idea not to purchase large credit card items or take out new loans on other purchases as this can actually stall the process and or change what you pre-qualify for.
Getting a Second Opinion...Has someone told you that you can’t pre-qualify to purchase a home? It can never hurt to get a second opinion! We have a great team here at Homes of Idaho and are happy to refer you to one of our knowledgeable lenders who will do their best to pre-approve you and get the best loan suited for you. Give us a call; we'd love to help you out!
Source http://www.investopedia.com/mortgage/pre-approval/
