Why Get Pre-Qualified or Pre-Approved?
1. Pre-qualification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes or a few hours at most, and is free.
2. While a "pre-qual" is non-binding to the lender (because the information you provide has not been verified), it does serve as a good indication to potential sellers of your general creditworthiness.
3. These days most sellers will NOT accept an offer without at least a pre-approval letter, so if you are serious about buying this is the first step towards getting you in your new home.
4. Many lenders now offer pre-approvals in which you provide documentation they use to verify your information and pre-approve you "through underwriting." This pre-approval can make 30-day closings possible and can put you on a level playing field with cash buyers. When presented properly to a seller, this may actually make your financing more attractive than that of a cash buyer.