When it comes to building a custom home, preparation is key. From lot location to room configuration, hopeful homeowners must have “all their ducks in a row” before breaking ground, from floor plans to financing. We love how eager our customers are to get started on bringing their dream home to life. But, we encourage you, along with each and every one of our customers, to follow our proven custom home building process from start to finish. Before we dive into the “why” behind pre-qualifying, let’s break down what pre-qualifying actually means:
A mortgage pre-qualification is a simple first step to determining your loan eligibility. Think of it as an estimate of what you can borrow to build your dream home. To find what you’re pre-qualified for, you’ll share some basic financial information with a lender, who will give you an idea of what you can afford to spend on your custom home, and what payments and rates should be. As long as your circumstances don’t drastically change, you’ll know your financing capabilities and be armed with the pre-qualification letter from the lender when you meet with a builder.
Keep in mind, this is not an approval for a loan, but rather the first step to discovering your purchasing power. The pre-qualification will give you an idea of how much you qualify for, opens the conversation as to what you’re comfortable with for a monthly mortgage payment, and can identify if any credit bumps on your credit report need to be addressed first. For this reason, it’s a good idea to get pre-qualified early in the process. It’s not a binding loan agreement, and it doesn’t mean you have to move forward with a mortgage right away, but rather it provides you the confidence you need to move forward when ready.
Now that you have a general idea of what a pre-qualification is, you may rightfully assume that experts recommend taking this first step. There are many reasons why individuals should consider pre-qualifying. Our top three reasons are:
1. Pre-qualifying helps you set realistic expectations for your future home.
Like we said in the beginning, building a custom home requires thoughtful preparation. The precise price you can afford isn’t always straightforward, thanks to varying factors like down payment, property taxes, and interest rates. Pre-qualifying will give you a ballpark of what you can plan to spend. This will give you a comforting sense of control in your home search. With the knowledge pre-qualifying brings, you can explore our many floor plan options, exterior styles, and interior finishes with confidence in preparation for your one-on-one design and pricing meeting with our New Home Consultant.
2. It will guide your mortgage loan search.
Not only will you have a better idea of what home plan to search for after pre-qualifying, you will better be able to determine what type of loan will be best for you. From 10-year to 30-year, fixed rate to adjustable, pre-qualifying will help you be well prepared with your precise home buying criteria and financing goals.
3. This initial step will actually save you time in the long run.
On the surface, any extra steps might appear to delay the home building process. But, taking the time to do things like pre-qualify for a mortgage loan will help save time in the long run. For starters, you won’t waste your valuable time touring or planning for homes that you can’t afford. It will help you budget during the design and pricing stage so you can prioritize your family’s must haves, wants, and wish list. And, you’ll be able to get on the builder’s dig schedule faster already having done some of the needed upfront work and documentation with the lender.
We hope we’ve made the benefits of obtaining a mortgage pre-qualification clear. Now, you might be wondering how to begin the pre-qualification process. Luckily, there are many lenders in all parts of the country that can give you the guidance you need to pre-qualify. But, when it comes to building a custom home, you need a lender that understands the unique process that is construction financing. When you build a custom home with Schumacher Homes, we will connect you with our trusted lending partners. Together, we will give you a smooth, customized home building process from start to finish.
About Schumacher Homes
Schumacher Homes, based in Canton, Ohio, is America’s largest custom homebuilder, with operations in 32 markets in 12 states across the country. The National Housing Quality award winning company has built over 20,000 homes, customized to fit each family’s lifestyle, since its founding by Paul Schumacher in 1992. Schumacher Homes takes each customer’s inspiration and gives it a home. Each Schumacher Homes location includes a one-stop shopping design studio and model homes displaying the latest in architectural and product trends. Stop in today, be inspired and receive your no obligation price quote.
