If someone asked you what the first step to buying a home was, what would your answer be?

Most believe it’s having a down payment saved up. Others feel it’s having enough to spend on renovations and furnishings. And some think it’s about finding the best deal possible.

While all the aforementioned agenda items are important, they’re still ranked lower than that ever-so-important first step in the home-buying process: Getting properly pre-qualified.

Proper pre-qualification is not just about the maximum dollar amounts and spending limits based on one’s income.  More importantly, it’s about overall lifestyle, asset allocation, credit history, and payment threshold. All too often, we hear of potential homeowners getting pre-qualified improperly through various channels who focus strictly on a dollar amount that proves to be out of the buyer’s price range. Not taking the above factors into consideration can lead to further headaches and frustration in the not-so-distant future.

Pre-qualification is the most vital step in the home buying process. It affects not only the homebuyer, but also the seller. In addition, parties such as agents and title personnel are a major part of the pre-qualification equation. Therefore, proper disclosure of your income, assets, cash reserves, and overall expectations to your mortgage representative is of great importance simply because it keeps your best interests at the forefront.

Initial Pre-qualification (prior to finding a particular property) is typically expressed in a price range because each home negotiation is unique. There are variables in each negotiation such as whether or not the seller is willing, or able, to contribute towards closing costs and overall condition of your house of choice, property taxes, and possible association fees. 

Once a home of interest is located, the best practice is to return to your mortgage representative with specific numbers regarding taxes and asking price. This will allow for ample preparation and absolute certainty that these numbers still fit the overall loan parameters.

Obtaining proper pre-qualification indicates you are a serious buyer and can lead to a more pleasurable experience for yourself and all parties involved in the home-buying process. It also helps you stay within your means and not get into a house that’s outside of your price range.

Home-buying has earned the reputation of being one of the most stressful experiences you and your family can go through. But that doesn’t need to be the case. Chances are great that people who express those opinions were not properly educated, nor sought out the means to alleviate that stress, and therefore got in over their heads. Just like anything else, if you approach things correctly from the very start, better end results will be your profit.

Don’t get in over your head. Take the first step and properly educate yourself on what will make your home-buying experience go as smoothly as possible! Discover how you can get properly pre-qualified and learn more about the tools necessary to successful home buying by contacting the experts at Loan Web USA today!