Why Should a Buyer in Fort Bend or Greater Houston get pre-qualified?
One of the first steps to buying a home is deciding how you are going to finance your property. The reason most buyers are advised to get pre-qualified with a mortgage lender is primarily based on the client getting informed of their purchasing power.
Most buyers have a good idea of what type of home they desire i.e. they know the neighborhood they love in Fort Bend, or which school district they want their kids to attend, or the style of home they like best, etc. However, most buyers will need assistance navigating the often complex waters of real estate financing; and thus, the mortgage lender and Realtor become their trusted team of advisers. Essentially the pre-qualification helps decide, ‘How much you can afford to purchase a home.’ Although, most people have an idea of the maximum amount of money they ‘want’ to spend, the mortgage lender will inform their clients on ‘exactly’ how much their clients can afford. The mortgage lender sets the price range and the Realtor helps you find all the homes for sale in your desired area (e.g. Sugar Land, Richmond, Rosenberg, etc.) within the given price range.
Another good reason for getting pre-qualified is the amount of time it takes to complete the full process. Pre-qualification is the first step to pre-approval. These two terms are often used interchangeably, however, the pre-qualification is before the loan officer analyzes your whole financial picture i.e. before all your supporting documents have been fully verified. Once the loan officer receives your pre qualification application he/she will check it and say, yes or no. If yes, than the next step is sending in documents such as identification, tax records, employment info, account statements, etc. Once the loan officer receives these documents and verifies them you are then graduated to being pre approved for the loan. The complete approval only happens after you submit an offer on your dream home, it is accepted by the seller, and your contract is sent to the loan officer. Once the lender gets the executed contract he/she sends your loan to underwriting for full approval (this can take a couple of weeks or more depending on the type of loan).
The typical time frame for getting a mortgage pre-approval is usually a a week to a couple weeks (depending on verification complications). Pretend you find a home for sale that you must buy, yet you haven’t been pre-approved for a home loan; unfortunately, the home might get sold to another buyer by the time the loan officer finishes your paperwork. The pre-approval not only tells you your price range but allows you to make an offer on a home and possibly lock in the deal before another buyer. Remember this rule, offers on a house without a pre-qualification will get overlooked by 99% of sellers and an offer with a pre-approval letter is better than an offer with only the initial pre-qualification letter. This is why a pre-approval is important, it lets the seller know that you are a serious buyer.
Also, another consideration is for individuals with past credit problems. The pre-qualification application allows the loan officer to see credit problems and offer solutions to resolving the issues and getting you approved. The earlier someone starts in the pre-approval process the better suited they are to resolve credit issues and complications, and then purchase a home in the near future.
If you need more written information a good article by Smart Money is 7 Tips for Getting a Pre-approved Mortgage
Otherwise you can continue to the next section: Choosing a Mortgage Lender