Why is it important to get pre-qualified by a lender before starting the home buying process?
It’s important to get pre-qualified by a lender so that you will know what price range you qualify for, the type of loan that fits your criteria and how much money you will need for a down payment and/or closing costs. This will eliminate wasted time and energy looking for homes that are out of your range.
In addition, when the market has less properties available for sale than there are buyers to buy them, the competion heats up. Those buyers that have been pre-qualified and have started their loan application can close faster. This is a definite advantage in getting the seller’s attention to choose your offer or at least allow you to be in the running.
Keep in mind, when purchasing REO homes (bank owned properties), you may have to pre-qualify with the bank’s lender of choice before you can even submit an offer. Although you may still use the lender of your choice, this helps give the seller confidence regarding your qualification. In the end, you win. You will have a couple of lenders bidding for your business.
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