Are you considering buying a new home? If so, you've picked an excellent time to shop for a new residence. Interest rates for mortgage lending are at a historic low, making it an ideal time to secure a conventional loan to purchase your home. For people who want to streamline their homebuying experience, it’s always a good idea to connect with a mortgage lender or two first. By doing so, you can discuss your current financial situation, as well as the type of home you're seeking. While speaking with a mortgage lender, topics you're likely to review would be how much money you have available for a down payment, your employment history, and your credit score.
The mortgage company will need this information to extend the best rates and terms available. Generally, the higher your credit score, the more stable your employment history, and the more money you have as a down payment help to prequalify you for better loan terms.
When shopping for a home, it's easy to get overwhelmed by all the listings available in your area. When you work with a mortgage company, you can save time by prequalifying for a loan. Once prequalified, you know exactly how much you can spend on your home purchase. Instead of wasting time viewing homes that are outside of your budget, you can focus on the new or existing homes that fall within your prequalified loan amount.
In addition to saving time during the home searching process, prospective homebuyers get a few extra benefits from getting prequalified. People who have prequalification letters can bid on homes they like with more confidence. Since the company has already completed a majority of the needed paperwork, the chances of mortgage approval are much higher for prequalified buyers than those who are not qualified first. While having a prequalification letter does not guarantee that the seller will accept your bid, it can help if you're dealing with a motivated seller.
Have you looked at a house that isn't perfect, but could be? With a prequalification letter, you have the power to negotiate with the seller. Reasons to negotiate the deal or price would be in instances where the home requires significant work, such as needing a new roof or other structural repairs. In most cases, the seller should be willing to work with you to meet - at least - somewhere in a happy middle. The happy middle could be the seller making the needed improvements before selling or reducing the selling price so the buyer can fix it after purchase.
Once you get the news that you've successfully negotiated a deal with the seller, your prequalification letter can help to expedite the house closing. Since needed paperwork is semi-processed, the loan can get issued faster, resulting in the quicker closing date, making both the buyer and the seller happier with the transaction.
Need help to prequalify for a mortgage loan? We're here to help! Ask about Burnsville first time home buyer program.