Get Pre-qualify for a Mortgage

2009 December 11

Looking to buy your new home requires a mortgage loan — that is, your unlucky self didn’t win the $200,000,000 lottery jackpot last week.

Well, now you need to apply for a loan for that dream home. Did you get a loan pre-qualification? No? Too late. Another buyer has bought the property, because you weren’t prepared.

Getting pre-qualify is an important step when purchasing a property. Pre-qualifying for a mortgage means the information you have provided to the potential lender qualifies you for a loan. The next step in the process is to obtain pre-approval. If you have pre-approval for a mortgage, the lender has determined the information you have provided is accurate and it is is willing to lend to you.

With a pre-qualification, the borrower is typically asked for social security number or other identifiers. A borrower will give their employment, income and asset information and the amount of current monthly debt. In addition a borrower is asked about their general credit worthiness.

A pre-qualification will contain the credit scores and much more information. Your social security number is used to get a credit report, find your credit score, and overall credit worthiness to purchase the property.

Apply for Mortgage Pre-qualification

Gather some specific information about your needs and financial standing prior to applying for pre-qualification of a mortgage. Prepare copies of your tax returns, paycheck stubs, and W2s.

To pre-qualify for a mortgage, fill out an application with a lender. Most lenders offer applications on their websites.

Have adequate income to qualify for the loan. Lenders may have a specific income-to-debt ratio you must meet to prequalify for a mortgage.

Have steady employment. Lenders want to see that you have the income to make the monthly payments.

Know how much of a down payment you can afford. Traditional down payment amount is 20% of the purchase price. Putting this much will increase your chances of getting the loan and lowering your interest rate — and your payments.

Make sure your credit history is accurate, and credit score is adequate. Get a free copy of your credit report at AnnualCreditReport.com or call 1-877-322-8228.

Bank Failure Friday, FDIC Closed 131 Failed Banks
How to Raise Your Credit Score

Share