Does it Help to be Pre-Qualified by a Lender?
The pre-qualification process can be completed fairly quickly, based on less information than is required for getting pre-approved. A pre-qualification letter is an opinion from a lender of the maximum amount of real estate you can qualify for. In a competitive seller’s market, such as the Seacoast area of Maine and NH, an offer from a buyer with a pre-qualification letter could lose out to a person who is pre-approved.
Get Pre-Approved by a Lender
There are several benefits to going the extra mile and getting a pre-approval letter. First of all, you will know exactly how much real estate you can afford. When you find a property you want to buy, your offer will be in a better position than someone less prepared. Finally, being pre-approved is more efficient; it reduces the amount of time it will take your lender to fund your loan. Be prepared to provide comprehensive documentation, which the lender may independently verify, including but not limited to:
- Job and career status
- Monthly debt payments
- Cash available
- Total assets and debts
Warning: Once pre-approved, and continuing through the time you are “under contract” on a property and until you close, it is important not to icur any additional debt. This is not the time to finance the purchase a car or furniture for your new home, without checking in with your lender.