Mortgage prequalification is important, but you may find out—the hard way—that this may not be enough to buy a home.
Homebuyers are often told they need to prequalify for a mortgage. This is not bad advice—in fact, it’s rather good advice…up to a point. A prequalification is only a baby step toward getting a loan. What you would like to be is preapproved, which is why many homebuyers confuse the two similar-looking terms. You may be asking, “Well, what’s the difference?” Here are three reasons as to why a mortgage prequalification is not enough to purchase a home.
Your loan might not be approved.
A prequalification is usually based on information about your employment and income that you provide verbally to the lender. It may, or may not, also be based on your credit score, which is what actual mortgages are approved on.
You may look for the wrong home.
Without a proper preapproval, you may be setting your sights too high, or too low. Shopping for a home takes a lot of time, and that could mean a lot of wasted time and effort. Realtors won’t spend much of their time with prequalified buyers; get preapproved on the other hand, and they’ll be eating out of the palm of your hand.
Sellers may not accept your offer.
Sellers are very conscious about those that bid on their homes. Place an offer with a prequalification, and the seller may insist you have a preapproval. Dean Rathbun can help make that happen.
Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.