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Get Pre-qualified Before You Shop for a New Home

The Importance of Getting Pre-qualified for a Mortgage Before You Shop

 

Most buyers are excited to shop for a new home.  After all, it’s fun to look at houses online or in person and get an idea of what’s out there. But you’d be wise to visit with a mortgage lender beforehand and get pre-qualified or pre-approved for a mortgage before you shop. Why?  Here are several reasons, courtesy of Jeff Teplitz of Coldwell Banker Mortgage in Burlington, VT.:

1.    Most sellers, these days, require it before they will accept your offer.  Going out looking for homes without having a pre-qualification first is like going to the store without your credit card. Sellers want to be assured that someone has agreed to lend you money so they know you can afford to actually buy their home. If you have to start that process after you’ve found the perfect home, you’re taking a chance that it could be snatched up by another buyer while you’re waiting for an approval.

2.    Getting pre-qualified first helps buyers focus on a specific price range.  There’s really no advantage to going out looking at homes in a price range you can’t afford.  Sitting down with a lender and finding out how much of a mortgage you can qualify for and how much down payment you’ll need are helpful pieces of information to know.  

3.    It gets the buyer prepared for the transaction coming up.  Mortgage lenders are required to ask for more verification information than ever before and this can take longer to gather than you thought.  Getting organized early and knowing what to expect when you do finally find the home of your dreams, insures that you are ready to go quickly.

4.    Another great reason for going through the preapproval process early is that lending rules, products, programs and guidelines are always changing.  So, even if you have financed and/or refinanced a home in the past, you may find that things have changed.  Some products and programs have disappeared and qualifying ratios are tighter than ever.  It’s good to know what credit issues or past debt you have to clear up, and have an idea of how long that will take, before you make an offer on a home and agree to a closing date. 

 The difference between getting a pre-qualification and a pre-approval is in the verification of information the borrower provides.  You’ll be asked to provide more information and the lender will need more time to verify the information for a pre-approval letter than will be required for a pre-qualification.

So, bottom line, it’s best to sit down with a lender to see how much of a mortgage you can qualify for and, therefore, how much house you can buy, before you go shopping for a new home. It’s never too early to start preparing for what will be one of the biggest purchases of your life!

To get your pre-approval process started, contact The von Trapp Team at 802-846-9563 orJeff Teplitz, Coldwell Banker Mortgage at Jeffrey.teplitz@mortgagefamily.com or (802) 881-7980.