Who Can Benefit By Pre-Qualifying Mortgages?

Basically, people who are thinking about acquiring a property and are eager to start their search. With a pre-qualification, they will have an idea of how much money they can borrow. That way, they will not waste time and gas looking at houses or apartments that they will not be able to afford.

If you have not received a prequalification, then search for one. The internet, the yellow pages and the opinions of your friends, relatives and coworkers are a good source of information. After evaluating all of them, go to the lender you have chosen and ask for a mortgage loan pre qualification. Take in consideration that a lender makes the prequalification based in the information you are going to give to him. If you are not accurate enough, then you may end with a range of mortgage loans that will not reflect you real credit situation. Don't waste your time and prepare yourself with the exact numbers of your financial status.

Are There Any Advantages?

Of course. First of all, you will save time. The fact that a credit institution has searched you for lending money means that they are interested in you. It will be much easier to apply for a mortgage if you have been invited first.

Second, once you go to the lender with your pre qualification, he will know what kind of property you would be able to buy, focusing in the exact mortgage loan that you may be interested in. Remember, time is money and a fast efficient service is something very hard to find. Credit institutions want to show that kind of commitment. It's a wise method to maintain their clients and bring new ones.

And third, the seller will be more interested in possible buyers who have a pre approved mortgage than those who still have to search for one. It could give you the advantage you need in a high demand market.

As you can see, both definitions are different stages of the same process. A good rule of thumb is, pre qualify for mortgage and start looking for properties in that price range. Once you have found three or four options in which you are really interested, return to the lender and ask for a mortgage pre approval. Only then you should go to the house seller and make an offer. There's nothing better than to have an advantage over the rest.