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Should I Get Prequalified for a Mortgage?

By Jamie Cooley on June, 13 2019
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Jamie Cooley
Jamie Cooley

Sr Loan Originator
Jamie has 10+ years’ experience in personal finance with nearly 1,000 loans closed! He enjoys helping others succeed & teaching - not only what he’s learned, but what he’s seen through his experience.
Jamie Cooley is a Sr Loan Originator with Fairway Independent Mortgage Corporation
NMLS#1044127

Why get prequalified before you start your home search? In today's fast paced environment with a wealth of information at our fingertips, we want it all - and now. So why pump the breaks and get prequalified first?


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You might find yourself wanting instant gratification when it comes to buying a new home, but I'll show you why this sequence is out of order and how it will actually slow you down.

There have been a lot of changes in the house hunting process as a result of HGTV; for homebuilders, it has caused an uphill battle on the real cost of construction compared to what you'll find on DIY shows, but it has also given homebuyers a false perception as to how the process of buying a home really works.

It's hard not to want to go out and look at homes, find something, and be able to move in tomorrow because that is the fun part of the process and the only part you really see on TV shows.

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PRO TIP: When you decide it's time to buy a new home, one of your first calls should be to a reputable local lender for prequalification - a quick, simple process of helping you determine your budget.

Prequalification is NOT the same as getting Preapproval for a mortgage.

What is Prequalification?

During your prequalification process with a loan officer, you'll answer questions about your lifestyle and finances to help determine the right loan for you.

For example, my prequalification typically only takes 5-10 minutes and will save you an enormous amount of time, money and emotional expense down the road.

We'll talk about what your comfort payment is and what out of pocket expenses you have. From there, I'll be able to help you determine a budget that you'll be comfortable with.

 

PRO TIP: It is important to be honest & upfront with your lender about your credit history and finances to get an accurate estimate.

Why Get Prequalified?

It is a quick & easy step to make sure your search is on the right track!

What if you find the most perfect home only to find out the payment is outside of your comfort zone?

What happens when you find a house you love but someone else who is already prequalified & has their finances in order can contract it first?

Prequalification is a quick phone call, it doesn't have to halt your home search in it's tracks. You'll be able to get the peace of mind you need & confidence of knowing that you are shopping in the right price point for your budget.

Not to mention, the team at Omega will be able to quickly & easily identify the communities, floor plans & homes that best meet your budget & timeframe!

With prequalification, there is nothing to lose and a home to gain. 

5 Quick Steps to Homeownership

When you start with prequalification, your new home search will be on the fast track to homeownership!

 

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Note: If you decide to build a new home vs. buying a move-in ready new home, the construction process begins after loan approval.

What is Preapproval?

Preapproval for a mortgage is when your loan officer checks your credit and verifies your documentation so that you can be approved for a specific loan amount.

This typically takes a bit longer and is similar to the process for applying for a loan once you've signed a contract on a new home.

Do I Need Preapproval to Shop for a New Home?

No - absolutely not! Getting prequalified is more than enough to get started.

There are many experts who believe preapproval is more valuable for home shoppers, but this is a common misconception that resulted from a highly competitive housing market where sellers had their pick of buyers with offers over asking price and preapproval letters.

PRO TIP: When it comes to new construction homes, the best thing you can do is to be educated about your own finances.

At the point you've decided that a new home is the right fit for your family, a quick phone call for prequalification can make the process of finding the perfect home one that you'll cherish, instead of one that you're afraid of.

I'm Prequalified, What's Next?

Once you have your budget set, you'll want to start getting your financial ducks in a row.

PRO TIP: The sooner you start the process of getting your paperwork together for the loan application, the easier it will be to apply for a loan once you've signed your contract.

 

Click here to reach out to me for more tips, help with mortgage questions, or to apply online - I'm happy to help!  - Jamie

 

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Featured Expert

Jamie Cooley is a Sr Loan Originator with Fairway Independent Mortgage Corporation and has been recognized as a Top 1% Mortgage Originator in America the last 3 years. Jamie is an Omega Builders preferred lender and works closely with our home buyers to ensure a smooth closing from start to finish.

NMLS# 1044127


This article is provided for informational purposes only. Omega does not warrant or guarantee the accuracy of the information provided and makes no representations associated with the use of this information as it is not intended to constitute financial, legal, tax, or mortgage lending advice. Omega Builders encourages you to seek the advice of professionals in making any determination regarding, financial, legal, tax, or mortgage decisions as only an informed professional can appropriately advise you based upon the circumstances unique to your situation.

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