A pre-qualification is what turns an intention into an offer a seller can act on. It costs nothing, it takes one conversation and a folder of documents, and it is the single most useful thing you can do before you tour a house.
Why it winsyou the house.
In a market where a good listing sees several offers, the difference between yours and the next one is often not the number. It is whether the seller believes it can close.
- A seller takes you seriously
- An offer with a lender letter behind it is an offer a seller can act on. Without one, it reads as an intention, and in a market where a good house sees several offers, intentions lose to arrangements.
- You shop one price range, not three
- Knowing what you can borrow before you tour houses is the difference between a search and a wander. It also spares you the particular misery of falling for something you were never going to be able to buy.
- The paperwork happens early
- Income, assets and credit get reviewed while nothing is on the clock, rather than in the fortnight after a contract is signed, when everything is.
- You can move quickly
- When the right listing appears, the work of deciding whether you can afford it is already done, and writing the offer is a phone call rather than a project.
One conversation,then a number.
- Talk to a loan officerA conversation about what you earn, what you owe and what you are hoping to buy. Fifteen minutes, and no application yet.
- Get pre-qualifiedSend the documents, and the lender puts a figure and a letter behind it — the letter is what accompanies your offer.
- Shop with a numberYour agent searches against what you can actually borrow, and writes offers that a seller can take seriously.
- Apply on a specific houseOnce an offer is accepted, the pre-qualification becomes a full application on that property, with an appraisal and underwriting.
The hold-up in most pre-qualifications is not the lender. It is the fortnight spent finding a W-2. Gather these first and the rest moves quickly.
- Photo identification and your Social Security number
- Recent pay stubs, and W-2s or 1099s for the last two years
- Federal tax returns for the last two years, and business returns if you are self-employed
- Recent statements for chequing, savings, retirement and investment accounts
- A record of any other income you want counted — rental, pension, support
- Details of current debts: cards, car loans, student loans, any existing mortgage
Self-employed, newly employed, or paid in commission? Say so early. It is a normal situation with a well-worn process, and the documents asked for are simply different ones.
Local, licensed,and reachable.
Tell them what you earn, what you owe and roughly what you are hoping to buy. Fifteen minutes, no application, and no obligation on either side.
We sell houses.They lend the money.
The Hogan Group Real Estate is a real estate brokerage, not a lender. The loan officers above work for Mercury Mortgage, and any figure, rate or term comes from them in writing rather than from us. A pre-qualification is an estimate based on what you tell a lender; it is not a commitment to lend, and a full application on a specific property is what follows it. You are free to use any lender you like — these are the ones our clients keep coming back to.