Borrowing before Buying: Why Prequalify for a Mortgage?

By Karen Lawson
Calculators for Mortgages Columnist

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Often home buyers look for mortgage loans after finding a home they want to buy.  Real estate agents, home builders and others may offer referrals to mortgage lenders. It's smarter to shop for mortgage loans first and to consider getting mortgage preapproval before looking for a home. Prequalifying for mortgage financing before getting caught up in home shopping can help expedite your home purchasing process.

 

Online Mortgage Calculators: Useful for Determining Affordability

Borrowers typically use monthly payment amounts to determine how much they can afford to spend. Before you start shopping for a mortgage you can get some idea of what you can afford to borrow for purchasing a home. A variety of online mortgage calculator tools can help estimate affordability, monthly payments, and financial requirements for mortgage preapproval. The calculator tools are easy to use and can be useful in planning to buy a home or determining how much you ca afford to pay for a home. These tools are intended to provide estimates only; individual circumstances can contribute to varying results.

Advantages of Mortgage Preapproval

Looking for a mortgage loan before home shopping can help you find affordable mortgage financing that can meet your current and future needs and lifestyle. Mortgage loans come in all shapes and sizes, and it's important to think beyond getting the keys to your new home.

• Knowledge: Mortgage preapproval can help you understand what types of mortgage loans can meet your needs. You'll also gain some understanding of the process of getting a mortgage and learn about options in mortgage financing before making an offer on a home.
  

• Get Seller's Attention: In areas where homes are in high demand, your offer may compete with others. Prequalifying for a mortgage can be attractive to sellers; full mortgage preapproval can be an added incentive for sellers to accept your offer.
  

• Save Time: Buying a home is a major decision, and can be stressful. You'll want to avoid pressure and problems as much as possible. Mortgage prequalification allow you to concentrate on choosing a mortgage and learning what you can afford before you shop for a home or make an offer. Once your purchase offer has been accepted, there will be a period of time when the property will be appraised, any necessary repairs made, mortgage approval will be finalized, and any other issues will be resolved. If you know where you stand with mortgage financing before making an offer, this can reduce potential delays associated with last minute problems.
  

Mortgage calculators can be the first step in mortgage pre-qualification. Get an idea of what you can afford in the comfort of your own home and then find a lender to help you complete the transaction.

About the Author
Karen Lawson is a freelance writer with extensive background in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.