Mortgage Prequalification
Beginning the mortgage prequalification process is the first step that every potential home buyer should take. By starting the process as soon as you decide that you are going to begin actively looking for a home you not only simplify the process for yourself, but you gain a competitive edge over other potential homeowners who are not prequalified.
How it Relates to You.
The primary way that mortgage prequalification helps you, the home buyer, is that it answers the question “how much house can I afford?” There are just to many factors involved in the answer to this question (credit history, employment history, debt, mortgage programs) that a short or easy answer is impossible. The only way you are going to get a clear answer is through prequalification. Their is no worse feeling in the world than finding your dream home and then finding out that it is out of your price range, or that you might not qualify for a mortgage at all.
How it Relates to your Real Estate Agent
Potential home buyers provide their real estate agent with dozens of specific details about the type of home that they want, while often overlooking the most crucial detail: what they can afford. Window shopping for a home is fun at first, but after a while you and your agent are going to want to narrow your search parameters down to houses you can not only see yourself living in, but that you can make a legitimate offer on.
How it Relates to the seller.
Home sellers are looking to sell their home for as close to their asking price as they, as quickly as they can. When you make an offer on a house, the seller is going to consider both the offer price, and the speed that they think they can close. If you still need to go through the entire mortgage prequalification process not only does that increase the time that it will take for you to close, but you suddenly become a liability. If they accept your offer and you do not qualify for the agreed upon amount then they have effectively lose out on any potential offers they would have received while they waited for you. Basically, very few sellers will be willing to take a chance on a buyer who is not gone through the mortgage prequalification process.
In closing.
Hopefully the previously listed information will help you on your journey to home ownership. Much like life in general, buying a home is all about information and timing. By starting the mortgage prequalification process as soon as you start looking for a house, you provide yourself with free, vital information, and position yourself to act with speed and certainty if your ideal home becomes available.