5 Reasons to Get Prequalified Before House Hunting
Looking for the right home is stressful but skipping the important step of prequalification before you start looking for a new home can set you back. With a prequalification in hand, shopping for your next home can be a little easier. Here’s how a prequalification helps you as you start your search.
What is a prequalification?
To get prequalified, you will meet with your loan officer to review your income, debt, and credit profile. You will want to bring “The Big 5”: the most recent 30 days paystubs, the last 2 years’ W2s, the last 2 years’ tax returns with all pages/schedules, all pages of 2 months most recent bank statements, and photo ID. With this information and a discussion identifying a monthly mortgage payment with which you would be comfortable, your loan officer can get you prequalified.
Know Where You Stand
Eliminate the chance of disappointment and know your path to homeownership. With a prequalification, you’ll know exactly how much home you can afford. With that number in your back pocket, you can focus on finding the home that is right for you. The median home value in Nebraska is $167,977, with the majority of homes (43%) ranging between $117,255 - $234,410 according to Neighborhood Scout. Any credit issues that could hinder you down the line are also spotted at this stage in the mortgage process.
Streamline Your Search
Because you’ll know how much home you can afford, you can streamline your search by looking only at homes that fit your budget. You won’t waste precious time looking at houses outside of your price range. A prequalification can allow you to spend time on what really matters – like, “is that triangular window a deal-breaker?”
You’ll be Taken More Seriously
Sellers and Real Estate Agents will take you more seriously as a buyer if you have already been prequalified. You are a more serious buyer because you have the backing of a lender that has looked at your financial background.
Have an Advantage in a Competitive Market
Being prequalified can give you the upper hand in a multiple-offer situation. Because you are backed by a lender, your offer can be considered more serious than others that are not – shop with confidence! A prequalification shows that you are ready and able to buy the seller’s home. This is especially important because, according to Insurify, Nebraska had the second-most competitive real estate market in the country.
Faster Closing Time
You may also be able to shorten your closing time. Because the lender has already collected much of your financial information in the prequalification process, the closing process can be sped up significantly.
Questions about getting pre-qualified for your new home purchase? Contact our friends at People's Mortgage in Omaha!