Buying a home is a complicated process that involves banks, real estate agents, lawyers and a ton of moving parts. The very first step a buyer should take is to get pre-qualified for a mortgage. It’s not a necessity but it helps remove murkiness and confirms that people can borrow funds to buy a home, and how much they will have to work with. It will save you time and possibly heartbreak as you search for your first or next home.
It’s a simple process and qualification is based on your financial profile. Here are some tips to help you get pre-qualified.
A credit report is a snapshot of a borrower’s credit history. It outlines their debt history and their ability to repay loans. It is a vital document for lenders to review as they make their decision.
Typically, you need to provide a credit report as part of your pre-qualification application. If you have a poor score, consider holding off for a few months as you work towards improving it. During this time, focus on paying off debts, pay incoming bills on time, and don’t borrow any money.
You can also meet with a credit counselor to create a strategy to improve your score.
Your Financial Information
Pre-qualification doesn’t require you to submit all your documentation but you need to have your numbers in order. Numbers refer to your financial information, which can include household income, assets, liabilities, down payment amount, bank statement and the previously mentioned credit score.
Before contacting your lender to start the pre-qualification process, consult with your bank to get your financial information in order.
Be Honest and Transparent
To get pre-qualified, a lender needs to assess your financial situation and history. To do so, you need to provide accurate information. Under no circumstance should you try to conceal a debt or lie about your credit score. Not only will a lie on your application result in rejection, it could put you in bad standing with the lender.
Contact us today to learn more about mortgage pre-qualification, or to start the process.