STEPS TO PRE-QUALIFICATION

If you're interested in buying a home, before the search process begins, you must prequalify for a loan. Here are the four steps to pre-qualification. The loan prequalification process determines your level of affordability to purchase a home. 

Step one is, determine who your lender is going to be and submit a loan application to them. It's important that they have a complete application, prior to the mortgage planning meeting, to ensure they know what documents to request from you. 

Number two, is to schedule a mortgage planning meeting, either over the phone, or in person. That’s when the lender will evaluate how much money you make, how much money you have to put down and talk about the different loan programs that are available to you. They also spend a good amount of time reviewing your credit. The lender will use that time to make recommendations on things you can do to increase your credit score, if it's appropriate, to make sure that you're getting the best terms available in the market. 

Number three, provide your income and asset documents. These are going to be pay stubs, W2s if you're self-employed. It's going to be personal or business tax returns. If you own other real estate, it's going to include mortgage statements and tax statements. The lender must make sure that the debt-to-income ratios that you talk about during the meeting are correct. So, they can qualify you for the right amount. 

And Number four, is when the loan scenario is finalized. This is the exciting finish to getting you out shopping for a home. This is where your lender finalizes your loan program and tells you how much you can afford to buy and sends you out shopping with your agent. And this is a very important step to take before you go out to look at any homes.  

So, that's it. The four steps to becoming pre-qualified for a loan. If you have any questions, or would like a referral toa great mortgage lender, or need some support, give us a call so we can guide you with your decisions.