Is It Beneficial To Be Pre-Qualified by a Lender?
The pre-qualification process may be completed fairly quickly, based on less information than is required for getting pre-approved. While it is fast and it does help, 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, an offer from a buyer with a pre-qualification letter could lose out to a person who is actually pre-approved.
Become Pre-Approved by a Lender
There are several advantages to going through the steps to receive a pre-approval letter from your lender. First, you will know exactly how much real estate you can afford. When you find the 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 status
- Monthly debt payments
- Available cash
- Total assets and debts