How to Get Prequalified for a Mortgage?

Low-cost home loans provide affordable ways to finance residential properties. Whether a buyer desires a townhome, a single-family home or a luxury estate, a long-term fixed-rate mortgage may be used to help facilitate the purchase. Knowing how to get prequalified for a mortgage can guide prospective borrowers in the right direction.

Securing a Loan to Buy a Home

Mortgage lenders are generally prepared to fund loan requests that may range between $100,000 and several million dollars.

However, a variety of industry-recognized standards are followed to minimize a lender’s exposure to certain risks.

When applying for a mortgage loan, a borrower will need to supply specific information and documentation for an underwriter to review.

After a thorough examination of a borrower’s financial situation, a decision will be made to approve or to deny the loan request.

Although, a prospective homebuyer may want to know the ideal price range to shop for a home. With preliminary information that a lender receives from the buyer, a prequalification for a mortgage may be provided.

Perform a Financial Review

While a prequalification for a home loan is less formal than a mortgage pre-approval, a lender will need some basic financial information.

Therefore, a borrower should review payroll earnings for the past 30 days, W-2’s and tax returns for the past two years and monthly debts that are currently reflected on credit bureau records.

Additionally, a lender may also want details about recent bank deposits for the past 60 days, to know whether enough funds are available for a down payment toward a home and if a borrower will have financial reserves after the closing of escrow.

Speak With a Licensed Loan Officer About Getting Prequalified for a Mortgage

Although, a real estate agent, a homebuilder or a home seller may place a limited amount of weight on the strength of a mortgage prequalification, it provides clarity for a borrower who wants to know where to begin shopping for a home.

After providing some basic details to a licensed loan officer, such as monthly earnings info, total annual income for the previous two-year period and the amount of money that is available for a down payment, a prequalification may be performed.

A borrower who receives a mortgage prequalification is certainly more prepared than a buyer who might be wasting time and eventually disappointed by shopping for a home in unaffordable market areas.

Based in California, Right Start Mortgage offers home loans in AZ, CA, CO, NV, OR, TX, WA, WY.

* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.

Get in Touch With Our Team