The pre-qualification process is vitally important for several reasons. We’ll fill you in on why.
Getting prequalified is one of the first and possibly most important steps of the home-buying process. After speaking with an agent, the very next step before seeing homes is getting a pre-qualification letter.
A pre-qualification is essentially a letter you receive from a lender after you share some basic financial information with them. This includes pulling your credit, which lets lenders run some calculations to determine what you can afford based on your debt and income.
Things that affect your qualification include, but are not limited to: income, cash on hand, debt-to-income ratio, and credit score. Even if you already know all of this info, it’s important that we know it too. Without following the proper steps, you run the risk of finding your dream home, then finding out you can’t afford it. Even if you can afford it, you might not be able to submit an offer without a pre-qualification letter. You don’t want to rush and you don’t want to go through that disappointment.
How would you feel in this situation? Unfortunately, this exact situation occurs every day. Now, being pre-qualified doesn’t guarantee that you’ll win a home. However, in some cases, it’s the only way you can try.
On the other hand, maybe you don’t want to get pre-qualified because you’re just not ready to buy. The homes you see on the market today probably won’t be on the market in a few weeks, so take your time. Here are the answers to a few common questions about pre-qualification:
How long is a pre-qualification good for?
In most cases, they’re good for up to 90 days. It’s a hard pull of your credit, but you can get pre-qualified again after 90 days and any negative impact of the initial credit pull will have been resolved by that point.
Can you shop multiple lenders without multiple hits on your credit?
Yes, as long as it’s within a certain period of time. To be safe, try to get that process done within two weeks. However, it could be up to a month depending on what’s being pulled.
A potential client’s willingness or unwillingness to get pre-qualified is a good litmus test to determine how serious of a buyer they are. There’s a good number of people out there who just like to look at homes. There’s nothing wrong with that, but sellers want serious buyers.
Your pre-qualification provides us with very important information to advise you on what homes you can see and what offers we can make to put you in a winning situation.
I hope this situation helps demystify the pre-qualification process a little bit. If you have any questions or need a lender recommendation, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.