Who should consider getting prequalified for a mortgage?

In today's real estate landscape, available properties at reasonable prices are in short supply. It's a seller's market, and potential buyers frequently find themselves competing with multiple offers for the same home. Just last week, we had a couple looking for a perfect place to house their growing family. They found a home that seemed just right in terms of size and price, and they were confident they could afford it and qualify for a mortgage.

However, when their application reached our desk, it became clear that things were not as straightforward as they appeared. While we will likely be able to help them qualify for a mortgage, what this couple should have done before making an offer is come to us for a mortgage prequalification. We're not talking about a flimsy online assessment, but a comprehensive application that includes all the necessary documents. Essentially, it's a full-scale mortgage application that guarantees, without a doubt, that once you find a home, you'll secure the financing needed to close the sale.

Why invest time in visiting homes, falling in love with one, making an offer, and getting excited, only to be rejected for a mortgage later? Mortgage prequalification provides a clear, real-world assessment of your options, both what's within reach and what may be out of your budget.

A mortgage prequalification will tell you how much you can borrow (you might be pleasantly surprised), your expected monthly mortgage payments, and an interest rate that's locked in for a specified period, usually around 120 days. If you're shopping for a new home, this information gives you the confidence of knowing exactly what you can afford. It helps you avoid the disappointment of falling for a house that's beyond your financial means, but it can also reveal that you're ready for the home of your dreams without you even realizing it. A mortgage prequalification opens that door of possibility.

However, it's important to note that a prequalification is not the same as a mortgage approval. When making a purchase, ensure you have a financing condition in place because the lender will need to assess the property during the mortgage approval process. You'll need to provide the required information, such as the promise to purchase, MLS listing, and any other documents the lender requests for property assessment.

Furthermore, any planned financing can fall through if your financial circumstances change. Be cautious about switching jobs, taking on additional debt, missing payments, co-signing other loans, or using your down payment funds elsewhere. Maintaining a squeaky-clean financial profile is crucial during the financing process.

No matter where you stand in your mortgage journey, don't hesitate to reach out to us, whether by phone or email, at Fred and Martin Mortgages. We'll walk you through all the possibilities. We're here to prequalify you before you embark on your housing search. Indeed, this should be your initial step before visiting any homes.

Fred and Martin