Land Loans: FAQ on Getting Pre-qualified
We answer all your frequently asked questions about getting pre-qualified, including the benefits, what's on the form, and the difference between a pre-qualification and an application.
In this article, you'll find:
- Pre-qualification definition
- Pre-qualification vs. application
- What is on the pre-qualification form
- And more...
What You Should Know About Land Loan Pre-Qualification
If you’ve started looking for the perfect property to own, you might be wondering what “getting pre-qualified” means and what the process looks like. Our Relationship Managers at Southwest Georgia Farm Credit pre-qualify folks every day, so we gathered your most frequently asked questions about pre-qualification and talked to one of our very own Relationship Managers!
What exactly is a pre-qualification?
A pre-qualification provides you with a letter stating that under certain conditions, you may be approved for a loan up to a certain amount. The maximum loan amount for a pre-qualification is $500,000, and the pre-qualification is valid for 90 days.
When should I get pre-qualified?
Most customers prefer to get pre-qualified while they’re shopping around for land.
Why is it beneficial to get pre-qualified?
A pre-qualification helps you understand what you can afford, allowing you to focus on properties within your price range. We recommend getting pre-qualified because it considers various factors related to income and credit score, which is beneficial for us to know upfront. Even if we cannot provide financing immediately, we can guide you on how to improve your situation for future financing.
Getting pre-qualified also speeds up the loan and buying process because most realtors request a pre-qualification letter when a buyer submits an offer on a property. Once you are pre-qualified, we have already pulled your credit and done some preliminary work. When you return ready for the loan, we only need to verify the information provided on the pre-qualification form and ensure the property you’ve made an offer on is something we can finance. From there, we proceed to the appraisal, attorney processes, and then closing! The faster we get all the needed documents, the quicker we can move the loan through the process.
Are there any fees associated with getting pre-qualified?
No! A fee may be charged later in the loan process once a full application is received and processed.
Once I’ve found a property, what do I need to do next?
Customers who have found the property they want to purchase typically use the pre-qualification letter to make an offer, and a sales contract is generally signed. All you need to do next is send us a copy of the official contract, and we’ll let you know what else we need at that time.
Ready to get pre-qualified?
We hope these answers to your pre-qualification FAQs have helped clarify what getting pre-qualified really means and what the process looks like. If you think you are ready to take this step, reach out to your local Southwest Georgia Farm Credit branch.