How to get Pre-Qualified
Pre-Qualification comes with a lot of paperwork. This means you need to Pay Stubs, Employment records, Work History, and way more. However, getting qualified is the first step in the home buying process. This will tell you what exactly a bank is willing to lend you. Which will set your budget for buying a home. There are a lot of lenders out there and tons of different ways to find the perfect lender for you. The best bet may be asking around. Find out what lender other people that you know and trust went with. Then go from there, find out what their loan requirements are. Find out what their interest rates and see if they are the right match for you. It’s best to shop around and find the best possible interest rate. That way you are not taking a high-interest rate and taking money out of your own pocket.
Where do I go to compare lenders to get Pre-Qualified?
Often times there are places online that will ask you basic information and pair you with a lender, and give you other information on lenders that may go well with you. Nerd Wallet is a good option. They have a tool that can help match you to lenders in your area. However, the best option might be to seek out a mortgage broker. They may be able to give you a much better rate.
What is a Good Rate?
There are a ton of different ways to compare rates. You’ll want to look for the lowest rate you qualify for. Different people will qualify for different rates. That’s because of your credit score. The higher your score – the lower your rates will be. Someone with a 650 credit score might get approved for a mortgage at a 4.5% or even higher interest rate. When you decide it’s time to shop for your dream home make sure that you have the highest credit score possible for your particular situation.
So I got Pre-Qualified, now what?
First off – Congratulations on getting Pre-Qualified, you are well on your way to buying your home. Whether it’s your first, second or third home. It’s a big milestone. Now that you have that powerful piece of paper from the lender you can go to a real estate agent, or broker and start looking at homes. You typically won’t be able to get help from a real estate agent unless you can prove you are financially stable enough to buy a home. After you find that agent you’re ready to move on to looking. This is the one time in your life where you can be as picky as you want to be. However, keep your list of wants short. You don’t want to spend years looking for the perfect home (unless you do). Set reasonable expectations, and finally – get the property inspected!