How to Get Prequalified for a Mortgage Loan
Mortgage pre-qualification lets you know how much you can spend on a house before you start looking. Pre-qualification does not require documentation from you, just honest answers to financial questions. If your offer on a home is accepted, you will then move through the pre-approval process, when documentation is needed, and then on to finalizing the mortgage loan.
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Things You'll Need
- Pay stubs
- W2 forms
- Bank statements
- Credit report and score
- Personal financial information
Instructions
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Answer financial questions posed by the possible lender honestly. The interview can be conducted over the phone or in person and typically lasts about 30 minutes. You will need to discuss your income, your credit report, your history of paying down debt, any loans you have outstanding for cars or anything else, and any late payments.
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Obtain a letter from the lender stating how much you can borrow for a home and how much of a down payment you can make. Give a copy of this letter to your real estate agent. Your agent can then show you homes in your price range, making your house-hunting experience more efficient.
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Before you make an offer on a home, make sure your credit report is as clean as possible and you explain any problems to your lender. Late payments and no payments are problematic and need to be carefully explained because mortgage lenders want their loan repaid on time and in full. If your credit history is not good, you might want to delay buying a home until you can clear up problems and establish a history of paying debt on time.
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Ask questions of your lender to make sure you understand the mortgage process and what to expect during the term of your loan. Make sure you understand late fees, when they are applied, and how many nonpayments are required before your lender puts your home in foreclosure.
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Tips & Warnings
Provide accurate and timely information to your bank or financial institution.
You do not necessarily have to spend what the pre-qualification amount; you can always spend on a house. You might, in fact, feel more comfortable about the transaction if you spend less.
References
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