One way to make the home buying process faster, easier and less stressful is to get pre-qualified or pre-approved before starting a home search. Pre-qualifying for a loan takes the guesswork out of the equation for the buyer, the seller and the real estate agent. It saves time and energy for everyone involved. This gives the homebuyer a better idea of exactly what they can afford. It gives the seller some assurance that the sale has an excellent chance of going through. It saves the real estate agent from doing unnecessary legwork. Everybody wins.

Pre-Qualification Versus Pre-Approval

There is a difference between being pre-qualified and pre-approved. To pre-qualify, the loan officer will make an estimate of what the applicant can obtain. A letter will state what the potential buyer can qualify for without a verification of all debts and assets. The pre-approval process goes one step further. It completes the verification process. In both cases, there will still be a few formalities to cover once the ideal property is found, but the uncertainty factor for financing will be non-existent.

Saving Time

One way pre-qualification saves time is it creates a direct approach. The potential buyer knows exactly what is affordable and what is not. This eliminates the time and energy taken to look at property they cannot buy anyway. It brings a more direct focus to which homes are realistic for purchase.

Reducing Stress

One of the most stressful parts to a home search can be putting a contract on a house, then waiting to see whether the mortgage lender will approve the loan. This process can sometimes take several days. There is no point sitting on pins and needles, waiting and second-guessing the process. With pre-approval and pre-qualification, they won’t wonder; they will know.

Taking Risks

If the buyers are not approved for a loan but they have their hearts set on living there, some consumers may be tempted to take unwise financial risks to make it happen. They may borrow from less than ideal sources to close the gap, such as high-interest loans or hesitant family members.

Avoiding Disappointment

Perhaps the most popular reason people choose to pre-qualify for a loan is to make sure they are looking in the right places for their next home. Real estate agents often see disappointment on the faces of their clients when they think they have found the perfect home, only to discover it is out of their price range. If the loan is not approved, the house hunting process starts again from square one.

Happy Sellers

Sellers prefer dealing with pre-qualified and pre-approved buyers because it removes the guesswork on their end as well. The process helps them sell their home faster. They can continue on with their plans when they know there is a solid chance that the contract will go through. This might tempt them to add in things like closing costs or make small concessions that otherwise would not be offered.