The first and
most important step in finding your new home is to get your financing
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.
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?
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
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
Once you give the loan officer the information you should have a
pre-approval letter in no time!