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Secure Loan Lender

Step 4: Secure Loan Lender

Prequalification - Quick, Easy, Free

One of the great myths of home buying is that becoming prequalified for a mortgage loan is difficult, time-consuming, and filled with hassle. The truth is that it is an easy, painless, and important step in your purchasing process.

Your realtor will recommend you to a lender (mortgage companies, banks, credit unions, and other lenders) who, with nothing more than your Social Security Number, can run a tri-merged credit report and supply a prequalification letter—for no charge. We cut all of the hassle out of the process.

Why Prequalification is Important

Prequalification gives you valuable leverage in negotiating the purchase of your home. It also gives you hard data about the highest mortgage amount you can afford, and points out the best type of mortgage for your financial situation. We always recommend prequalification because:

  1. It's quick and easy.
  2. It will give you concise information about how much home you can buy—you don't want to fall in love with a home you can't afford.
  3. You may be able to afford more home than you think.
  4. Some sellers will not accept offers from buyers who are not prequalified.
  5. In a multiple-offer situation, a prequalified Buyer has a significant advantage over a non-qualified buyer.

Pre-approval Provides Added Leverage

The step beyond prequalification is pre-approval, in which a lender takes a more in-depth look at your financial situation. To gain pre-approval, you simply submit an application with a few simple documents—your W-2 from the year prior, most recent bank statement, and most recent pay stub - to verify your financial and employment status. Your Dream Town REALTOR® will keep the process simple, and you will often receive a pre-approval letter the same day you submit. Self-employment, divorce and alimony, investment properties, and immigration status may necessitate additional documents. You can often complete your application over the phone or on the internet.

Much like prequalification, your Dream Town Agent uses the pre-approval information provided by your lender to help you:

  • Select homes in a proper price range;
  • Understand that, with today's low interest rates, you may be able to afford more than you think; and
  • Present a strong purchase offer—when you're preapproved, you are well positioned to win negotiations

Improve Your Credit Profile

Past credit problems do not necessarily disqualify you for a loan. Many late payments that show up on a credit report may not have been your fault—for instance, if your health insurance company was late in paying a caregiver, the past-due status could appear on your credit report. Divorces often cause missed or late payments as couples separate their finances. Get a copy of your credit report and clear up any past problems to help improve your standing with lenders.