Should you get pre-qualified before you buy a house?

By: Zeng Han Jun, CPCG, Singapore

Getting pre qualified and pre approved is an entirely different thing. However this article shall focus on getting pre qualified before the deal search.

An investor and a home buyer employ different kinds of mindset when presented with a deal. Each of them thinks differently when determining the purchase of the house. An investor has more considerations like the future development plan for the piece of land where the house resides, surrounding developments, land quality and so on. A home buyer focuses more on short term factors like nearby schools, existing eateries and etc. Before all the due diligence for your deal begins, the first step is always getting pre-qualified.

Being pre-qualified is an informal process when compared to being pre-approved. Pre-qualification allows you to know the range of deals that you are able to undertake based on your financial profile. I get daily calls and emails from home buyers who are seeking to be pre qualified. Based on their existing income and debts, we will generate the maximum pre-qualified amount that they can borrow from the bank.

By knowing the price range of deals that you can undertake, you will have a clearer idea of the profile of the house that you are going to buy. It makes your deal search much easier as you can quickly filter out those prospects that are not aligned with your personal goals.

Pre-qualification is the first step before your home buying process. If investing requires you to understand both yourself and your investment, then pre-qualification is akin to knowing yourself and due diligence is like knowing your investment. Always get pre-qualified before any deal search as the first step of your investment or home buying strategy.

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