Does it Help to be Pre-Qualified by a Lender?
The pre-qualification process can be completed fairly quickly, based on less information than is required for getting pre-approved. While it is fast and it does help, a pre-qualification letter is an opinion from a lender of the maximum amount of real estate you can qualify for. In a competitive seller’s market, an offer from a buyer with a pre-qualification letter could lose out to a person who is pre-approved. While it is still important to get pre-approval, and while pre-approval can help buyers, still, pre-qualification is the way to go. However, despite this being the case, pre-qualification is only part of the equation. Despite it being an important aid to you when you’re buying a home, there are some things that getting pre-approved could greatly aid with.
Get Pre-Approved by a Lender
There are several benefits to going the extra mile and getting a pre-approval letter. First of all, you will get a sense of just how much real estate you can afford. This will allow you to better outline how much you are willing to spend on a property, and create a better, more accurate offer without pushing your budget. That way, when you find a property you want to buy, your offer will be in a better position than someone without getting pre-approved. Finally, being pre-approved is more efficient when it comes to the home buying process. It reduces the amount of time it will take your lender to fund your loan. Be prepared to provide comprehensive documentation, which the lender may independently verify, including but not limited to:
- Job and career status
- Monthly debt payments
- Amount of cash available
- Total assets and debts