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Pre-Qualification FAQ
frequently asked questions:
Documents required for review:
• 2 year tax returns including W2’s
• Bank statements for 2 months
• Paystubs for 1 month
• Full Credit Report (We can provide with consent)
What is mortgage prequalification?
Mortgage pre-qualification is an evaluation by a lender that determines if you would qualify for a home loan. It also shows how much the lender would be willing to lend you. Getting pre-qualified is the first step towards getting a mortgage, but it does not guarantee a loan. Your pre-qualification letter should be submitted along with your offer to show sellers that you are a serious and qualified buyer.
How to get pre-qualified for a mortgage?
The lender will ask for some basic information about your financial history and will need to run a credit report. If you meet the lender’s guidelines for issuing a loan, he or she will issue you a pre-qualification letter, which states the home loan amount the lender is willing to let you borrow.
How long does it take to get prequalified for a mortgage?
Because it’s an informal, nonbinding evaluation, you can get pre-qualified in a day or two, sometimes less. Depending on the lender, pre-qualification can happen in person, over the phone or online.
Why should I get pre-qualified for a mortgage?
There are a number of reasons why it’s a good idea to get pre-qualified for a mortgage. A pre-qualification letter can help your offer stand out in a competitive market, and help show sellers that you’re a credible buyer who can act fast and secure the financing needed to purchase a new home. In some cases, sellers may require a pre-qualification letter from every prospective buyer who needs financing to purchase the home. Getting pre-qualified can also help you during your home search because it can tell you what you can comfortably afford to spend on a home.
What if I am turned down for my mortgage pre-qualification?
If you don’t qualify for a mortgage pre-qualification, there are some things that you can work on that may increase your chances: work to improve your credit score, fix any errors on your credit report, or create a plan to reduce debt and/or save for a larger down payment. In many cases, your lender can work with you and give you tips on how to improve your chances of getting your home loan pre-qualification.
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