Prequalify for a Mortgage | New Homes Market Center
Whether you are building a custom home, joining a build on your lot program or buying a home direct from a seller or builder, the sooner you start preparing, the more you will be able to save. Even if you do not think you will be ready to own a new home for several more years, it is important that you begin to plan now. The first step you take in buying a new home is pre-qualifying for a mortgage or construction loan.
After going through the mortgage loan pre-qualification process, you will find out the monthly mortgage payment and maximum home price for which you qualify. Then your mortgage loan officer can structure a mortgage plan based on your current income and debt that will allow you to achieve the monthly mortgage payment, purchase price, and/or construction budget you are comfortable with. The importance of getting pre-qualified for a mortgage before you start looking for a new home or builder cannot be overemphasized. It will help you get the best terms available.
Looking for new homes before you secure financing can expose you to many complications. There may be fraudulent activity, an unpaid medical bill, or other issues on your credit report that you are not aware of and will need attention before you can qualify for a mortgage loan. Having a credit issue can prevent you from receiving the best possible loan terms or interest rate and may take time to resolve.
A pre-qualification will identify any discrepancies with your credit, give you an idea of the price range of homes you should stay within, and inform you of the down payment amount you need to make if one is required. Keep in mind that the mortgage pre-qualification will determine the maximum you can afford, but is wise to search for new homes (or construction budget) in a slightly lower price range than the maximum. You do not want to overextend yourself financially without leaving room for possible unexpected future expenses.
Another benefit of pre-qualifying for a mortgage loan is that it may give you leverage when you find a new home you want to purchase. It shows the seller or builder that you are serious and capable of backing up your offer. A seller is more likely to accept an offer from a pre-qualified buyer.
There is a big difference between pre-qualification and pre-approval. Be very careful; just because a lender has told you that you are pre-qualified does not necessarily mean they approved you for a mortgage loan. The underwriter must review and approve your application, and you must provide all necessary documentation before the lender approves you for a loan. At this time, they will issue you a pre-approval. Final approval comes when the underwriter receives and verifies all required paperwork, title, appraisal, and insurance.
New Homes Market Center offers many services for buyers including a FREE pre-qualification with a mortgage lender. We offer this service with no obligation and our lender will help you each step of the way, even if that means helping you secure a better interest rate with the builder’s lender. Pre-qualify for a mortgage or construction loan by filling out our secure online application .
TIP: If you are buying a new home direct from a production builder, than it is likely that you will not need construction financing because the builder will cover these costs while the new home is being built. A construction loan is only necessary for those individuals who build a custom home or sign up for a build on your lot program. To find out more about construction loans please visit our Build section.