3 Things You Need To Know To Pre-qualify For A Mortgage
Don’t apply for a mortgage until you’ve read this.
Like with any major financial decision, you need to do your homework before pre-qualifying for a home loan. Here are the first top 3 things you need to know before you apply.
#1 Your credit score
Mortgage lenders evaluate your credit score to determine how much of a risk they’re taking on by lending to you. The better your credit score, the less risk you are and the better rates you’ll be able to negotiate. This makes your credit score one of the most important factors when it comes to getting a home loan.
You can usually check your score for free through your bank, credit union, or credit card company. You can also pull your credit report for free from all three credit bureau once a year online. If you have poor credit, try to take care of any negative accounts prior to buying a home. If you’re late on monthly payments for credit card debt, for example, start making payments as soon as possible.
#2 Can you actually afford it?
Make sure you’re not getting in over your head. Being a homeowner is financially smart and exciting, but you’ll need to be able to make your monthly mortgage payments. This is why mortgage lenders and companies look closely at your income and employment status. It’s important to prove you’re able to pay back your home loan. If you’re a first-time home buyer and need help putting down more money, there are national loan programs and grant assistance.
#3 Compare your options!
Comparing mortgage lenders on trusted online marketplaces like LendingTree is the smartest way to avoid settling. Never jump on the first offer you get. Think of it like anything else in life and make sure you know all of your options before making a final decision.
How to apply for a mortgage
Once you’ve done all your pre-qualification homework, it’s time to apply for your mortgage!
Here’s what you’ll need to do:
- Determine your needs: How much do you need to borrow?
- Gather your paperwork: You’ll need employment information, pay stubs, personal identification.
- Know your options: Compare rates from many different mortgage lenders to see which one is the right match for you.
- Choose your lender: Based on low fees, easy repayment terms, and a low-interest rate, it’s time to pick your lender.
- Complete approval: After you complete an application online through the lender of your choice, you’ll know right away if you’re approved or not. From there, you’ll be on the fast track to being a homeowner!