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  • James Tucker

The Pre-Qualification Process.

Skipping the Pre-Qualification Process

If you have thought about purchasing a home, chances are, you have heard the term pre-qualification. Pre-qualification is paramount in the home buying process. It is the road map to home ownership. You wouldn't go on a trip without any idea of how to get where you were going, so why attempt to purchase a home without knowing what you can afford. The pre-qualification process is the first step to home ownership. It is essentially a snapshot of you as a borrower.

Getting pre-qualified for a home loan is a painless process. The first thing you will need to do is contact a loan officer and schedule a time to fill out a loan application. This can be done in the office, over the phone, or online. The application process involves obtaining enough basic information to pull your credit report. Once credit is pulled and you loan officer determines that you will qualify, they will ask you to provide certain financial documents. These include tax returns, pay stubs, driver's license, and bank statements. Based on the information provided, your loan officer will be able to determine what loan products you will qualify for. Together you can select the product that best suits your needs.

Obtaining a pre-qualification letter has many advantages.Having a pre-qualification letter shows your Realtor that you are serious about purchasing a home. In most markets Realtors will require you to present a pre-qualification letter before they will show you any properties. Knowing that you are pre-qualified and what you can afford will help your Realtor narrow the search for the perfect home. Obtaining your pre-qualification will also help your buying power. Submitting an offer to purchase with a pre-qual letter increases your odds of having the offer accepted. The letter lets the seller know that you are qualified to purchase their home. This could make the difference as to whether or not you get your dream home.

A word of warning to both the home buyer and the Realtor; what lender you get pre-qualified with DOES matter. Make sure to do your homework and look at reviews from past clients and other industry professionals. You and your loan officer are on a team. The goal of that team is to get your loan from application to closing in an acceptable time frame. I take the pre-qualification process one step further and submit your file upfront to a credit underwriter to make a credit decision on your file. Once the credit approval has been issued you know you are fully approved for the loan. This saves both you and your Realtor time, energy, and potentially money. Buying a house is one of the biggest investments you will ever make. Do your research and choose the lender that is right for you. Let's get started today!

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