Shopping for a new home is very exciting. Before going searching for the perfect home in the ideal location, smart shoppers make sure to secure their financing first. Perhaps the most critical step to take before house hunting is getting financing lined up. Getting pre-qualified is vital because it: 1) gives you an idea of the price range you can afford and what loan amount you may qualify for; 2) provides you with estimates of your monthly payments; 3) often increases your chance of getting a seller to accept your offer; and 4) simplifies the home-buying process when you do find the perfect house.  

We will explore the benefits further below.

The Importance of Pre-qualification for Homebuyers

1. Know Your Budget

Before you start looking for houses, you need to know what you can afford. When you get pre-qualified with an experienced mortgage loan officer, he or she will give you a clear idea of your budget, allowing you to narrow your search for homes within your price range. When you know your budget, you can avoid wasting time and energy touring properties that are out of reach or outside of your comfortable monthly payment. In other cases, you may realize that you can actually expand your price range and afford more than you had thought.  

2. Competitive Advantage

When you are qualified by a reputable loan officer, you will be prepared to move quickly when you find the perfect home. You won’t have to find time to complete your mortgage loan application, submit your income and asset documents, and then wait for them to be reviewed by a loan officer before writing an offer because you are prepared and have completed that process. Instead, you’ll have your financing in place and can write and submit a Purchase Contract with immediacy.

Being pre-qualified or underwritten in advance often provides a competitive advantage, especially in a hot housing market (and especially if your loan has received a Conditional Underwriting Approval). Having been qualified ahead of time, you can submit a contract to buy more quickly than another buyer might, and when you present an offer with a Harborside Home Loans lender letter, sellers know that you’re serious about buying a home, that you have your financing already lined up, and that they can trust that their funds will arrive on closing day because your mortgage is being handled with care by Maryland and D.C.’s most trusted, reputable local broker.  

3. Identify Issues Early On

Being prepared ahead of time also simplifies the home-buying process. When you get qualified, your Harborside loan officer will review your financial picture in detail. They will review your income documents, credit reports, and asset statements and calculate your debt-to-income ratio ahead of time to identify and avoid any issues that might arise in underwriting, or even submit your loan application along with credit reports, income, and asset documentation for underwriting in advance to get you a Conditional Underwriting Approval. Such preparedness allows you to address any issues before you are under contract and your loan file is with an underwriter under the pressure of contract deadlines hanging over your head.

Getting pre-qualified, or getting Conditional Underwriting Approval, for a mortgage is a wise step to take as soon as you begin the process of buying a home. It gives you a clear idea of what you can afford and often simplifies home-buying tremendously. Getting pre-qualified or underwriting approved in advance can save you time and increase your chances of closing on the purchase of the home of your dreams.

Harborside Home Loans Loan Officers provide expert advice, make the pre-approval process simultaneously streamlined and thorough, and will help you win in a competitive market.