Buying A New Home - How To Get Pre-Qualified For A Home Loan
Written by: Carrie Reeder
If you are hoping to speed up the home buying process, you may
consider getting pre-qualified for your home loan. With a
pre-qualification letter in hand, real estate agents and sellers
will take you more seriously. Furthermore, sellers may readily
accept your offer over another bidder because financing is
Select a Good Mortgage Loan Lender
Pre-qualification letters are issued by mortgage lenders. Before
applying for a home loan, research different lenders and inquire
of their services. The easiest and fastest way to compare
different lenders is through the internet. Using online services
to secure a home loan is very convenient. Moreover, using a
mortgage broker to locate a good lender will save time.
There are lenders for every credit type. Hence, if you have poor
credit or no credit history, it is possible to get pre-qualified
for a mortgage. In this situation, a sub prime lender or high
risk lender will offer the best rates.
Provide Mortgage Lender with Documented Information
After selecting a good mortgage lender, the lender will request
specific information. This information is necessary is order to
complete the pre-qualification process. Before approving your
request, the lender must ensure that you are capable of handling
a mortgage payment.
For that matter, you must provide total monthly income and total
monthly debts. Paycheck stubs or banking statements are
acceptable. To determine your total debt to income ratio, you
must also tally credit card and other consumer debts. If you
have a low debt to income ratio, you will qualify for lower
rates. If you have excessive debts, the lender will consider you
a higher risk, and increase the interest rate.
Mortgage Lenders Review Credit Rating
Finally, before a pre-qualification letter is issued, the
mortgage lender will pull your credit. Credit scores carry a lot
of weight. Individuals with low scores rarely obtain a good
interest rate. Upon reviewing your credit, lenders will know
your amount of credit inquiries, credit accounts, balances due,
derogatory remarks, etc.
After the lender approves your request for a pre-qualification,
they will prepare a letter for sellers. The pre-qualification
letter simply states that an applicant's income and credit have
been verified, and the applicant is pre-qualified for a loan.
However, pre-qualification letters do not guarantee a loan.
About the author:
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