Getting prequalified1 for a home loan is a great way to guide you on your home search. What is prequalification? What are the benefits? Is it right for you? PrimeLending can help you answer all of these questions and others.
STEP 3: Prequalification
Getting prequalified for a loan before you start looking serves as the best roadmap for your home-buying journey.
What is Prequalification?
Prequalification is an estimate of what you might be able to borrow. You will provide your lender with information about your income and assets, and sometimes will submit to a credit check. Your lender then gives you an estimate of your loan amount and loan program.
How Does Getting Prequalified Benefit You?
- You will be able to shop with the confidence of knowing your exact price range.
- You can identify credit problems that can be addressed early in the lending process.
- You will typically have more negotiating power, as some sellers see more strength in offers from prequalified buyers.
- If you are self-employed or a commission-based buyer, prequalification can demonstrate financial backing if your income fluctuates more than those of salaried buyers.
- Prequalification gives first-time homebuyers the advantage of equalizing their offer with similar offers made by previous homeowners.
Other Prequalification Facts?
- Prequalification is offered by most lenders, including PrimeLending, at no cost.
- The prequalification process is not comprehensive and therefore is not guaranteed, nor is it considered any type of loan commitment. It simply shows that you’ve approached a lender who was serious about helping you determine what you can afford and will walk you through the process.
¹A prequalification is not an approval of credit, and does not signify that underwriting requirements have been met.