Why do I need a prequal?
The short answer is timing. The long explanation is below.
POV: you’ve been searching for months, and THE ONE finally pops up on Zillow Thursday evening.
You immediately email your agent and ask to set up an appointment for first thing Saturday afternoon. It’s perfect at the showing - everything you imagined and more. You want to submit an offer that day, and two offers are already on the table. The seller has asked for best and final offers to be submitted by Monday at 5pm.
What’s the problem here?
If you don’t have your prequal letter on hand, there is no way you’ll secure one in time for the best and final deadline. You’ll miss out on your dream home, as no seller will accept an offer without knowing you actually have the financing. The prequal process takes 24-48hrs, as you need to upload several documents (tax returns, retirement accounts, etc) for the loan originator to review before issuing a letter. Given loan originators won’t be working on the weekend, you simply won’t have time to get this done.
POV: You’re spending the week upstate, and something appealing pops up that you’d love to see tomorrow before heading home.
The seller has asked the listing agent to collect prequal letters from all prospective buyers before even confirming a showing appointment, as they live in the home full time and don’t want looky-loos traipsing through. Again, the prequal process takes 24-48hrs, so you’re going to miss out on this one.
Preparedness and eagerness are one of the many off-paper nuances that will support your offer and make your own life easier.
How much should I get prequalified for?
I always advise clients to get qualified for the maximum amount possible. This will 1: show your buying power and 2: keep you from having to increase the amount later, should something appealing listed at 20k above your letter amount come up.
But I don’t want a credit inquiry right now.
Well, then you’re probably not ready to buy a house right now. BUT most lenders will do a soft inquiry that will not affect your score.
What if my prequal is expired?
It’s no problem. At least you have something within the past year or so to show you can actually buy the house.
Ready to start your search?
