Mortgage prequalification can inform borrowers of their chances at approval. This preliminary process is essential for inexperienced applicants looking for feedback regarding their financial profiles. So why would you want to get a mortgage prequalification?
1. Mortgage prequalification takes your recent financial history into account. Typically, the window will be the past two years; based on these figures, a loan officer will evaluate the size of the loan you can afford moving forward. This is a critical part of the process; getting started looking for a mortgage is all about perspective. Mortgage prequalification makes it much more likely that you will make a decision pertaining to what you need rather than what you want.
2. Mortgage prequalification helps narrow down your options and focus on realistic figures so you can make the best decision for your budget. Prospective buyers who bypass this part of the process are making a mistake that might hurt them down the road. If you are looking outside the range of your affordable market, you may get approved for a loan that drains you with high payments and long-term debt that can be difficult to escape.
3. Mortgage prequalification is not a commitment. You haven’t committed yourself to anything until papers are signed, and this will only happen once you have been approved for a loan. Work with a lender you trust and can deal with comfortably. You shouldn’t feel pressured or bullied by your lender. At the same time, lenders can give you a frank and honest assessment of your chances at approval.
For more information about the mortgage application process or to begin yours today, visit our Mortgage Applications page.