Buying a new home is one of the biggest investments and purchases that most people will ever make. In order to purchase a home, all people will need to be pre-qualified for a mortgage in order to have their offer price accepted by a home seller. When you are looking to become pre-qualified for a mortgage, there are several tips and steps that should be followed to ensure you are able to receive a pre-qualification letter.
Understand Loan Options and Programs
When you are looking to receive mortgage pre-approval, the first step that you should take is to understand the different home loan options and programs. Most consumers today will qualify for several different loan programs, which can include traditional mortgage, adjustable rate mortgage, VA loan programs, and FHA loans. To get a better understanding of the pros and cons of each type of loan program available, it would be a good idea to do some research with the American Financial Network.
Check Your Credit
When you are looking to get a home loan, you should also check your credit report and score. Being approved for a mortgage, and getting a good rate, will be largely dependent on several financial factors including your income, down payment, and credit score. There are a variety of places where you can pull your credit report and score for free. It would be a good idea to do this several months before going for mortgage pre-approval. You should carefully review the report to ensure that all information is accurate and look for ways that you could quickly improve your score. Some quick ways to improve your score include paying down credit card balances or paying off any past due balances owed.
Another step in applying for a home loan is to determine your qualifications for a mortgage. All mortgage lenders have pretty standard mortgage requirements for you to qualify. Beyond having a strong credit score, you will also need to have an income level that supports the anticipated mortgage payment. Through the American Financial Network you will be able to find a mortgage calculator that will be able to figure out what amount of a mortgage you will qualify for. The resulting qualified mortgage amount will be based on your home debt-to-income ratio, which should be no more than 30%.
Find a Lender
Once you have determined the amount of mortgage that you will qualify for and know what type of mortgage you want, the next step is to apply for pre-approval of the mortgage. You can do this by going to any mortgage lender’s website and filling out an online application. The mortgage lender will quickly be able to provide you with some form of pre-approval notification, at which point a mortgage-lending specialist will reach out to you for more specifics. Normally, you will be able to receive a full pre-approval letter from a mortgage lender within a few business days.