If you are going to be looking into buying a new home soon, it may be beneficial to get a prequalification from a lender. It can be hard to get a home loan in Boca Raton, and getting a prequalification is one more added step; however, there are a few significant reasons why getting a prequalification can help you with the whole house purchasing process. The following article goes over what a prequalification is as well as a few of the most substantial advantages of prequalifying for your home loan with a lender before you even start looking for a new house.
What Does the Term Prequalification Mean?
Prequalification is a process that lenders put borrowers through to see if they are a likely candidate to qualify for a loan. If they determine that you would typically be eligible for a mortgage with them, they will give you an estimate for the loan amount you should be able to get through them.
Is a Prequalification Different Than a Preapproval?
The prequalification process should not be mistaken for a preapproval. A preapproval involves starting the home loan application as well as receiving a guarantee of the amount the lender will loan you. Unlike a preapproval, a prequalification only estimates the amount you could get. Preapprovals require more documentation and an extended period before the approval can be substantiated while prequalifying usually only takes a few items of information. Sometimes the prequalifying process can be done online without even meeting with a lender. Though prequalifying and preapproval can seem similar, they are very different.
Budgeting Made Easy, a Benefit of Prequalifying
If you are unsure what amount you would be able to spend on a house, getting a prequalification for your home loan is a simple way to learn. Once you know the price range you can afford, you can begin setting up a budget which gives you a monetary guideline for buying your new home. A better understanding of which prices are within your budget, allows you to distinguish the houses you can purchase and those that are beyond your means at this time.
It Is All About Saving Time
Hours and hours of your time is likely going to go into touring homes and searching online, and nobody wants to waste time looking at homes that were never in their budget from the start. It is never fun to look at a home and fall in love with it only to find out that your ideal Boca Raton house is too expensive for the home loan that you can obtain. Getting a prequalification will save you time and heartache in the long run.
Additionally, some borrowers with a prequalification can experience shorter wait times when getting their home loan because a portion of the paperwork and information is already complete. Each lender is different and having a prequalification may not always help in this circumstance, but it never hurts.
Planning and Budgeting Beyond the Initial Expense of Your Home
Getting a prequalification can help borrowers like yourself plan for the future by looking at the funding you have available and considering some of the other costs of homeownership. By knowing what kind of financing, you can get, you can look at costs associated with owning a home like furniture, immediate improvements, and utility deposits. Not knowing the amount of money, you can spend, hinders your ability to appropriately gage what you can spend on any of those other financial obstacles.
The All to Elusive Peace of Mind
Being prequalified for your home loan can alleviate the anxiety related to financing to some degree. Prequalifying allows you to feel more in control and prepares you for the critical step of taking on a home mortgage and lets you and your family focus less on needing financing and more on which home is right for you.
Your Prequalification for a Home Loan
After reading these benefits, you can see why having a prequalification for a mortgage before you start your home search is a great plan. Now you need to choose a lender who offers a prequalification. Nationwide Home Loans has a secure online form that will help you quickly determine if you can prequalify. We offer some of the best home loan rates in the Boca Raton area, and our loan officers are friendly, knowledgeable, and experienced with all the loan varieties that we offer. Fill out the prequalification section on our website or contact us here at NHL Lending to see if you pre-qualify today!