Need help with your home purchase?
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Use the links below to find all of the information you need about your home purchase.
Home For Sale
Real Estate Agent
Home Loan
Mortgage Rates
Credit Score
Prequalified
Home Owners Insurance
Home Inspection
The Close
How can I prequalify for a mortgage?
To get pre-qualified, first find a few lenders and compare
rates and closing costs - or you can go to a
mortgage broker and they will check the rates of
hundreds of lenders for you. To find out how much you can
pre-qualify for, the lenders will use these guidelines and
requirements as their main factors.
| ● Your Housing Expenses (Principal, Interest, Taxes, and Insurance) should be less than 40% of your gross income. The exact figures varies. Some lenders will require less of a ratio. To get advice on which lenders may require less, you may consult a mortgage broker. |
| ● Your Total Debt-to-Income ratio should be less than 50% - the lower, the better. This means that your total credit card bills, car payments, and other monthly debt, including your monthly housing expenses should be no more than 50% of your gross monthly income. |
| ● Your ability to prove a steady income and your credit history. |
| ● The property value compared with how much money you are putting down. If you have good credit, some lenders will not require a down payment. But in general, to get the best rates, you will need to use at least 3% of your own funds. |
Note that pre-qualification only qualifies you for a loan. It does NOT guarantee a loan.
When you are working on your home purchase, it is best to
get pre-qualified as soon as possible.
You may use it as a bargaining tool when you are trying to
buy your home. If you and another person are both
interested in one home, the seller is more likely to work
with the person who is already pre-qualified for a mortgage.
Here are some other reasons why it is best to get
pre-qualified for a mortgage even before you know what house
you wish to make an offer on.
| ● Know how much you can borrow |
| ● Confirm your ability to qualify for a mortgage based on your credit, financial and employment information. |
| ● Strengthen your position to make an offer on a house. A seller will be more willing to accept an offer if the buyer is pre-approved. |
Before you close on your house, you will need to do some other things - including getting your Home Owners Insurance.
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