Pre-qualification is where all home buyers need to start in the home buying process

The Benefits of Pre-Qualifying for a Home

Now that, the Albuquerque housing market is seeing a bit of a revival more borrowers are looking to get pre-qualified on home purchases. This important step is where all home buyers need to start in the home buying process. In fact, most realtors will not start showing homes to potential home buyers unless they have been pre-qualified. Pre-qualification not only qualifies the home buyer on how much they can afford on a house but also allows them to research exactly which loan programs are currently available on the market.

During the pre-qualification process, the borrower will be educated on what will be included in their mortgage payments such as taxes, home owners insurance, and mortgage insurance if necessary. Different loan programs will require different down payment amounts and some will require mortgage insurance while others will allow the lender to pay the mortgage insurance for the borrower. For example, the VA requires 0 down; the FHA allows 3.5%, and conventional loans will allow 3 to 5% down.

Another huge benefit of the pre-qualification process is that it outlines the total closing costs of the purchase transaction so that the borrower can understand just how much they will be required to pay in closing costs. It also equips the borrower with information to, successfully, negotiate closing costs with the seller.

Local Lenders vs. Internet or Out of State

It is beneficial for those looking to buy a home to use a local lender vs. those on the Internet or out of state because Internet and out of state lenders, and big banks do not always respond in a timely manner and may not personally have the borrowers best interest in mind. All too often borrowers find themselves at the mercy of those out of state lenders and big lending institutions and become just another application number.

According to Ben Lucero of Indigo Mortgage, “Borrowers always want to use a local mortgage company because as a local company we are always available and in contact with the borrower.”

If you are interested in pre-qualifying for a home in the Albuquerque area, please contact Indigo Mortgage at 505-836-5700 to discuss.