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 is a preliminary approval for a loan. It is not a full loan approval or a commitment to lend on behalf of Southwest Georgia Farm Credit. A pre-qualification is valid for 60 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.

How long does the pre-qualification take?

Typically, it takes within a day for loans $250,000 and under. For loans over $250,000, it can take anywhere from a day or two but no more than a week, depending on circumstances.

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.

What items do I need to provide for pre-qualification?

• A driver’s license (or some form of ID) and a completed pre-qualification form which includes:
  • General borrower information including if there will be a co-borrower, marital status, years of school completed, number of dependents, loan amount requested, loan term desired, and an estimate of current collateral.
  • General borrower employment information (including co-borrower) such as employer name, years employed, position, and years in the line of work.
  • Income (including co-borrower) gross annual base salary, and other forms of income like commission, child support, social security, and more.
  • Assets including automobiles, bank account balances, real estate owned, and more.
  • Liabilities including current debts, monthly payments, and other obligations like child support.

Keep in mind that pre-qualification is based on limited information and every case is different. Therefore, you may also have to provide other verification items. Your local Relationship Manager can give you more information on what they will need from you.

Is there a minimum acreage to purchase to get a loan?

No, we do not have a minimum acreage requirement. We offer loan programs for residential lots to be used for a primary residence, which vary in acreage size, and also offer ag/farm land financing for larger acre purchases.

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.