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Get Pre-Qualified

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Before applying for a mortgage, you need to qualify for a mortgage loan; for example, adequate income to support the continuing loan obligations and creditworthiness to demonstrate persistence in meeting credit obligations.

Why pre-qualify for a mortgage is important?

  • The lender will consider your income to determine the amount of the loan. Lenders look at your debt to income ratio to determine the amount of loan you will qualify for. In other words, the balances on your credit and other loans will reduce the amount of the mortgage loan you will qualify for. Your credit score determines the amount of interest and type of loan you can qualify for.
  • The down payment is equally important. This is the amount of money you have to reduce the amount you need to borrow or increase the value of the house you can purchase. Some of your down payments can be applied to your loan to decrease your loan interest; this is called buying down points.

Pre-approval letters also matter

Before you put an offer on a home, a seller will generally want to see a pre-approval letter. This letter tells the seller and their agent how much of a loan you qualify for, excluding the amount you have available for a down payment or have to bring to the closing table. Most realtors like to see a preapproval letter before they will agree to represent a buyer and begin showing them homes.

Based on your income, expenses, and credit, a lender will provide you with a pre-approval letter for the loan amount and type of loan that they are willing to lend to you based on those factors.

Where can I get pre-approved for a mortgage loan?

  • Your current bank or credit union. They typically have in-house loan officers and underwriters who review all of the information and decide if you qualify.
  • A mortgage lending company that specializes in residential home sales. They can look for a wide variety of loan products and lenders that best suit your need.