If you’re looking to purchase a home, the first thing you should do is obtain a pre-qualification. A pre-qualification can help you have a stress-free purchase transaction by letting you know how much home you can afford. Also, Real Estate Agents and even sellers often will only work with pre-qualified buyers.
What is a pre-qualification? A pre-qualification is a preliminary determination on whether the prospective loan applicant would likely qualify for credit under an institution’s standards and the amount of credit for which the prospective applicant would likely qualify.
What is the pre-qualification process?
Before taking a formal application, the prospective borrower will need to submit a pre-qualification request form or provide the following information to the Mortgage Loan Originator:
- Borrowers’ social security numbers
- Borrowers’ dates of birth
- Borrowers’ email addresses
- Borrowers’ phone number(s)
- Current address
- Previous address if in current residence for less than two years
- Employer name and address
- Previous employer name and address if at current job for less than two years
- Gross income amount
- Asset information (value of banking, investment, retirement, etc.)
- Current expenses (housing, credit card and loan payments, etc.)
- Current obligations
- Current market value of primary residence, if it is owned by borrower
- If refinancing, borrower also provides:
Year home was purchased
Original home purchase price
Total outstanding balance of all loans secured by the property
Estimated property value
Amount borrower would like to borrow
Once all the above mentioned items are submitted to your Mortgage Loan Originator, he or she will take all the items and enter them into a loan origination system (LOS). Then, he or she will review your expenses, debt, and potential down payments to determine how much house you can afford. After a loan amount is determined, he or she will advise you on your loan options. Please note that depending on your situation other documents may be needed.
If you have any questions on the pre-qualification process or would like to talk to a Mortgage Loan Originator, please click here.