How to qualify for a mortgage? It seems like such a simple question but to the first time home buyer, the process can be confusing. There are many things to consider in order to become a homeowner for the very first time, from choosing your lender to the type of loan you will use for your mortgage.
The first decision you need to make when considering a mortgage is if you will be using a financial institution or a mortgage broker. A bank will be able to provide only limited options for your mortgage needs while a broker will have several resources to pull from in which to find you the best mortgage rates and loan terms. Once you have decided between the two, you will need to be pre-approved for a mortgage.
The pre-approval process will help determine how much money you can spend to purchase a new home. The interest rate will be locked in, for around 120 days or less, as well as the loan term configured. This way, you will know how much your monthly payment will be as well as what type of home to look for in your search. Below are the fours things you need to begin the pre-approval qualifying process.
The lender will first require you to provide a form of identification so they can verify who you say you are. The ID will be used to confirm credit rating, bank information, etc.
The loan amount you will be provided will be determined based on your income. Proof of income will need to be provided to the lender via pay stubs and a letter from your employer may also be required. The information of your income will be used to ensure the loan you receive can be paid each month.
Your credit rating is very important to the pre-approval process. With a solid credit rating, you can secure a better interest rate for your new mortgage. You can still receive mortgage lending when you have a poor credit rating, but your interest rate may be higher due to insufficient credit. The lender will check your rating to see where you stand and then configure your loan details based on your score.
This includes property type, location, condition, and value. Copies of the MLS listing and purchase and sale agreement will be required. Most lenders will also need a full appraisal by a certified appraiser to determine the value and condition.
At Mortgage Guys, we can help you to achieve your homeownership dreams. We work with many lenders to secure you the best loan possible for a new mortgage or refinance. Let our team help you with the pre-approval process so that you qualify for a new home mortgage today.