Prequalification is an estimate, in writing, of the mortgage amount you’ll likely qualify for, based on your financial factors. It's the most powerful tool you can bring to your househunting journey — and many real estate agents recommend you get one before setting foot in a house. Why? Because you need it to work magic in these five ways:
1. Let sellers know you're serious
Slapping a prequalification letter atop your offer on a house says one thing: you mean business. It shows sellers that, should they accept your offer, you're able to back it up and close the deal.
2. Get a leg up on the competition
If prequalification isn't required to submit an offer, yours will stand out. Your prequal letter makes everyone else fade into the background.
3. Keep your goals in check
Work with your loan officer to determine the right loan type and amount for you. Prequalification doesn't mean you’re stuck, but it can keep you true to your #housegoals.
4. Put pedal to the metal for closing
Prequalification is the first step in the mortgage application process. Check that off your list! You’re one step closer to closing than anyone who skips this step.
5. Offer with confidence
You'll get a clear picture of what you can afford when you get prequalified – so you don’t need to wince when you offer on that dream house.