How to Get Preapproved For a Home Loan

Video Transcript

"Getting pre-approved for a loan can be a fairly easy process. I'm Richard Blake and I'm here to explain to you how to get pre-approved for a home loan. Basically they're going to look at three different items when you purchase your next home in order to lend you money on that home. They're going to want to know what your annual income is. They're going to want to know what your credit score is as well as how much money you have to put down on the home. Now with a pre-qualification really all that they're going to be interested in is your annual income. Generally you can multiply your annual income times three and that's going to give you an average number of how much house you can afford. With a pre-approval they're going to just take it a step further and they actually need your credit score at that point and time. And when making an offer on a home a pre-approval is really what you want rather than a pre-qualification because it allows the seller, the owner of the home that you're making the offer on, it allows them to know that you've taken that first step on speaking with a bank or speaking with a mortgage broker. Some items to bring with you when you speak with that mortgage broker or that bank is your income statements as well as all your credit card statements. They're going to want to know any information that you have based on whatever your monthly payments are. So anything that you have that's consistent, that you're consistently making a monthly payment on they want to know that information. What they're going to do is they're going to take your money out verses your money in which is called your debt to income ratio. The higher that is the better. The lower that is the worse. If you have a good ratio or a good debt to income ratio then you're going to be able to borrow more money from the bank, okay? Again, what you're going to want to do is contact your local real estate agent or your local mortgage broker, bring those items that we discussed. Your income and your debts. Bring that information to them so they know it ahead of time and that will consolidate the process for you. I'm Richard Blake. That's how you get pre-approved for a home loan. Have a great day. Thank you."