Pre-qualifying for a mortgage means the financial and other necessary information that you have provided the potential mortgage lender qualifies you for a loan. Prequalification is a pre-requite when applying for a mortgage. However, a lender’s prequalification does not guarantee that you will receive a loan from the financial institution, instead you have to obtain a preapproval to be sure you will get the mortgage. The mortgage lender verifies the information and sends a team to inspect the property you are planning to buy before approving the loan. Having your mortgage preapproved means the lender has determined that the information you have provided for prequalification is accurate and is willing to give you the loan. Follow the tips mentioned below to make the prequalifying process easy and smooth.
Prepare Some Information
Before applying for prequalification of a mortgage, gather some information about your needs and financial status. This involves determining the type of house you are looking for and the price range for buying a house in your area. Also make sure you have your personal identification handy. There are a number of mortgage loans available in the market, determine which mortgage type you are interested in obtaining. You also need to have a fair idea of how much down payment you can make on the loan.
Research the lending market before applying for prequalification to determine which lender offers the most affordable loan. Visit local mortgage lenders, national lenders and credit unions to find the best available option. Once you have found a mortgage lender, you will be required to fill out an application to prequalify for a mortgage. Usually you have to visit the lender’s office physically, but there are some financial institutions that offer online applications on their websites. Make sure you apply with just one lender at a time. Applying for more than one loan at one time will reduce your credit score.
Meet Lending Criteria
Mortgage lenders have specific lending criteria which the applicants must meet to make themselves eligible for prequalification. These include, adequate credit score, adequate monthly income and a steady employment. If you meet all of the lending criteria, you will most probably get an immediate prequalification for a mortgage; however, it will still remain subject to verification of all information provided by you. At this stage, you can start looking for a house, since you have an idea of how big a loan your lender is willing to give you.