How To Get A Mortgage Pre Approval: 4 Steps For Success

If you’re like a lot of people, you dream of buying your own home. But before making that dream a reality, you need to find the right mortgage lender and pre-qualify for financing. Pre-qualification is just one step in the mortgage approval process that helps buyers learn more about their unique situation and determine if they’re ready for a loan. Typically, lenders will offer preapproval letters with strict requirements for borrowers to meet before seeking approval for their loans through traditional channels such as Fannie Mae or Freddie Mac. Here’s what you need to know about getting mortgage preapproval:

Determine Your Monthly Payment

You’ll want to discuss with your mortgage lender the following:

· Your monthly payment. How much can you afford each month? What’s your ideal number? Are you willing to stick with that number through thick and thin? If not, what is the lowest amount that you could really go down to if things get rough?

· Down payment amount. What percentage of a down payment do you plan on purchasing a home (this can be anywhere from 0% – 100%)? Do be careful, though — if your down payment is less than 20%, it will require an extra insurance premium on top of your regular mortgage insurance premiums. This may cause some people planning on putting less than 20% down to reconsider their options.

· Borrowing amount. How much money do you want or need for everything else to work out as planned? It’s important to remember that most lenders suggest not borrowing more than 30% – 35% of what one makes each year because it can be difficult for some families to manage their debt payments when they’re taking out large loans at once!

Check Your Credit Score

Before you begin shopping for a mortgage, it’s important to check your credit score. Your credit score is a numerical representation of how good you are at paying bills on time and can be used to predict whether or not you will pay back your mortgage lender. Your credit history will also play an important role in determining what kind of loan terms you receive.

A low credit score may mean that lenders consider you too much of a risk and will charge higher rates or require larger down payments than they would with someone with better scores. It may also reduce the money they are willing to lend you because there is less confidence that they’ll get their money back if something goes wrong.

Find A Lender With Flexible Requirements

Finding a lender with flexible requirements may be the most important part of the preapproval process. If you have poor credit or other financial issues, it can be tough to find a lender who will work with you and help you achieve your goal of buying a house.

If finding a mortgage lender is difficult, try contacting several lenders before beginning the loan process. Ask about their policies on preapprovals and how they will handle credit issues before working with them in earnest.

Get Pre-Approved

Preapproval is a process that confirms you’re ready to buy a house. A mortgage preapproval means that you’ve been approved for a certain amount of money, which gives you more confidence when looking at houses. The lender will require information such as proof of income and employment history, credit history, bank statements, and tax returns to determine how much money they can lend you.

A bank would be your first choice if you’re looking for an exact loan amount and rate, but they might not be able to offer you the best deal on that specific loan. A mortgage banker can help you find a lender willing to give you what’s most beneficial for your needs and situation.

A mortgage banker will also explain the entire process of applying for and receiving the mortgage, so there are no surprises when it comes time to close your home purchase.

Conclusion

Getting pre-approved is a big step in the home loan process. It shows your lender that you are serious about buying a house and makes it easier for them to help you find financing. It also gives you a sense of security when looking at homes because if one doesn’t meet your needs, there will always be another.