How to Get Pre-Qualified for a Home Loan

How to Get Pre-Qualified for a Home Loan

Choose the best convenional home loan lenderIf you’re thinking about buying a home anytime soon, you’ll want to know all about the process. It can be a lengthy, confusing, and frustrating process for first-time buyers. But whether you’re a first-time buyer or a veteran in the home buying process, getting pre-approved for a home loan is key. Getting that pre-qualification is one of the best things that you can do to ensure your best possible chance of securing the home you want. A pre-qualification is essentially a promise from the lender that you qualify to borrow the amount of money necessary to purchase your dream home. NHL lending wants to make getting you pre-qualified easier and less stressful. So, we’ve compiled a few tips every home buyer should read.

What is Pre-Qualification?

Pre-qualification is an informal process where you will be interviewed by one of our mortgage professionals. Our professionals will determine your assets, income, and expenses. This entire process will help to give you a general idea of your price range that you can afford. Even though the pre-qualification doesn’t technically secure you a mortgage, it can provide insight into your potential mortgage rates and terms.

Proof of Income

All borrowers need to provide a proof of income. Whether you are a 1099 or a W2, you will need the last 2 years of statements, as well as recent pay stubs to show income. Additionally, you will need a year to date proof of income or any other additional income you may have. Additional income could be alimony, bonuses, or your last 2 years of tax returns. Proof of income documentation helps to just prove that you will be able to afford the loan.

Proof of Assets

Your bank will be able to provide your present bank statements, which will indicate what type of financial assets you currently are holding. You will also need investment account statements to again prove that you have the funds for the down payment and closing costs. Many lenders also like to see that you have some cash reserves because no one wants to expect the worst but the worst does happen from time to time. If you have a family member, friend, or loved one who is going to be assisting you with the down payment and closing costs, you will need to provide a gift letter to prove that this is not a loan but a gift.

Good Credit

This is probably one of the more familiar sounding requirements to pre-qualify. Having good credit allows lenders to reserve the lowest interest rates for those with good credit. Depending on your time of loan terms, you may be able to reduce your interest rate by putting down more money. Those who have a credit score below 580 are automatically required to put down a larger down payment. As a lender, we want to do our best to work with you as a borrower to get the best possible rate and terms.

Employment Verification

Reverse-MortgageAs an added precaution, many lenders will want to contact your employer to ensure that you are still employed. The purpose of this is to first, determine if you have falsified your salary and second to make sure that you are still employed as the paperwork and terms are still pending. If you have changed jobs recently, you will want to let your current and past employers know that they may be contacted in the near future. Many lenders want to confirm that they are lending to someone in stable employment. Again, at nationwide home loans, we want to work with you, however, we don’t want to sell you something that you can’t keep up with.

Getting pre-qualified for mortgage rates in Fort Lauderdale, FL is a great way to really see what type of mortgage and terms you can look forward to. Even if your dream house is out of your budget today, that doesn’t mean you can’t start planning for tomorrow. We want to help put you in the home of your dreams. If you are thinking about buying a new home contact us today to find out how you pre-qualify.