If you are ready to take the big step of purchasing a new home, it is time to pursue home financing pre-qualification to determine how much you can borrow.
If you are ready to take the big step of purchasing a new home, it is time to pursue home financing pre-qualification. Getting pre-qualified early helps you determine the maximum home loan amount you can get and which homes are in your price range.
Understanding the difference between pre-qualification and pre-approval is the first step. While neither guarantees a loan, a pre-qualification is when the lender gets an overview of your financial situation. Pre-qualification only provides an estimate of the mortgage you can get from that lender. The lender does not pull your credit history at this time. You can get home financing pre-qualifications over the phone.
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A pre-approval is when the lender looks at all of your financial documents, including bank statements, tax returns and credit reports, to qualify you for a mortgage amount and interest rate. Often, you must pay a fee for the pre-approval process. A pre-approval letter may be required for you to place an offer on a home or bid on a house in a foreclosure auction.
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So if you are just beginning your home-buying process, you may only want pre-qualification. Home financing pre-qualifications are straightforward and simple to get. Ask lenders for an estimate of the loan amount you may get. The lender’s representative will ask you for your income, credit score and current debts. Using this information, he or she calculates your pre-qualification amount. You can also ask lenders how much of a down payment you need and if you qualify for any government-backed loan programs. In addition, ask for an estimate of the closing costs you can expect to pay.
These home financing pre-qualifications provide a price range so you can start home shopping. If you want to get rate quotes from reputable lenders, go to Reply! now.