Pre-qualifying for a Mortgage Loan
Making the decision to stop renting and purchase a home can be stressful and challenging. First time buyers may be confused by the home purchasing process. One way to make the process of buying your first home easier is to get pre-approved for a mortgage loan. By obtaining pre-approval from a mortgage lender of your choice you can relax in knowing how much of a home you can afford to purchase, and that the loan is already approved so that when you find the home in the approved price range you have you can put in an offer and begin negotiating the terms for purchasing the home of your choice.
Some of the steps required to get pre-approved for a home mortgage loan include:
- Finding a lender. You need to shop around to find an expert lender in order to get the best deal on your mortgage loan as possible. Mortgage lenders are like stores where you can shop around to find a better price on the same item. Choose a lender with the lowest interest rate and best mortgage type for your particular circumstances.
You will need to put together a package with information like your income, monthly expenses, all of your debt, employment information, personal information, and credit report. In order to avoid lowering your credit score from too many mortgage lenders looking up your credit history, consider paying for your own credit report and making copies to include in the mortgage paperwork you give to the potential lenders. They may want to look up your credit themselves, but you should tell them that you want them to base their offer on the report you have given them and if they are the lender you choose then they can look up your credit once you make that decision.
Once you have chosen a mortgage lender, they will look up your credit history and check to verify all of the information you have given them is accurate. They may request additional information depending on your circumstances.
- After the lender has finished all the necessary paperwork they should be able to solidly verify the loan terms they originally said was attainable for you when you chose to use them as your lender. As long as the loan terms are acceptable to you the lender will then be able to offer you a pre-approval notice that states that you have done all of the preliminary paperwork and are qualified to receive a mortgage from that particular lender. The pre-approval notice should state who you are, who the lender is, their contact information, that you are pre-approved for a loan, and for how much you are pre-approved to purchase a home for.
Getting pre-qualified for a home loan allows you the freedom to shop for a home without worrying if you can get the loan you need to purchase it. Sellers and real estate professionals will also take you more seriously when they see that you have gone through the pre-approval process because they know you are truly serious about purchasing a home. The pre-approval notice may even help you to negotiate a lower purchase price for the home because the buyers and their agent will know that your mortgage loan is already approved and you are not going to make an offer on the home and then get turned down for a mortgage which is a waste of everyone’s valuable time.
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