The first and most important step in finding your new home is to get your financing lined up.

Being pre-qualified for a loan is a great tool when buying a home (assuming, of course, you are not intending on paying cash!). Being pre-qualified lets you know exactly what is affordable for you, and it tells the potential seller(s) that you are serious about buying their home!

In a hot sellers' market, if you are planning on buying a home and you are not pre-qualified, any offer that you submit on a property without a pre-qualification letter from a reputable bank has little to no chance of being accepted. Why?

Just think of it from the seller's perspective. If you're a seller, and you have multiple offers on your property (a common occurrence in this market), why should you take a risk by taking your property off the market while a potential buyer -- who may not get a loan -- applies for a loan with a bank?

Getting Pre-Qualified

What does it take to get pre-qualified? Basically, 15 minutes on the phone with a lender. The loan
officer from the bank generally needs to know the answers to four questions:

1. How much money do you make? (salary, commissions, etc.)
2. How much money do you owe? (total and monthly payments for credit cards, car loans, etc.)
3. How much do you have for a down payment? (checking/savings accounts, IRA's, gifts from family, etc.)
4. What is your Social Security number? (necessary to do a credit check)

Once you give the loan officer the information you should have a pre-approval letter in no time!