If you are a buyer in the current housing market, you probably already know how competitive it is. The pandemic, low interest rates, and of course supply and demand are all responsible for the bidding wars.
The national average number of offers on a home is currently four; even double for move-in-ready homes in highly desirable locations. So, what can would-be home buyers do to set themselves up for success in a multi-offer scenario? Get prequalified by a reputable lender.
Being prequalified for a home mortgage in any housing market is a good idea, but it is especially important in this incredibly competitive one.
What is mortgage prequalification?
Prequalification is one of the first steps in the homebuying process. Getting prequalified for a home mortgage gives you a reasonable estimate of how much house you can afford and what loan program options are available to you.
Prequalification also gives you an edge over potential buyers that may not be prequalified. It signals to sellers and real estate agents that you have the financial health to back up your offer, aiding in a successful transaction.
How Mortgage Prequalification Works
The prequalification process is relatively fast and easy. First, choose a reputable mortgage lender to work with. They’ll ask for basic documentation to verify your personal and employment financial background that may include:
- Bank statements and retirement or investment accounts
- A list of other assets you own
- A list of debts or other liabilities
- Income and employment details
- Employer contact information
- Credit score
In addition to estimating how much you could qualify for, the prequalification process may also uncover any issues that could prevent you from getting a mortgage. If that is the case, your lender can provide guidance on how to resolve those issues.
Once prequalified, you’ll know how much house you can afford. The lender will provide you a prequalification letter, which is good for a predetermined duration, so you can begin shopping for your dream home!
Getting prequalified is the first step towards homeownership. During the process, your lender will help identify the right loan programs that fit your goals and your budget.
Ready to Learn More?
Luxury Mortgage helps borrowers every day get prequalified in minutes! Let’s work together to help you win the homebuying bidding wars. Connect with one of our licensed mortgage consultants today to learn how to get started or use the buttons below.
We're dedicated to helping borrowers find the right home loan program for their situation. Contact us today for a free quote and consultation.
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