So you’re thinking about escaping your renting situation and diving into the world of home ownership – but what’s the first step? The answer is simple: pre-qualification!
What is it? In this step, you supply your lender with a snapshot of your overall financial picture, including your assets, debts, and all forms of income. This where you are given a gauge of what you can be approved for based on the information you provide. Again, it’s not a sure fire deal. You don’t HAVE to buy a house, and it also doesn’t mean the lender agrees to give you this amount.
Why should I get pre-qualified? Getting pre-qualified is a great time to speak with a lending professional, free of charge, to discuss your financial and home-buying goals. The lender will explain the various mortgage products available and advise you on what options best suit your situation. Most importantly, even though you may not want to buy a home today, the pre-qualification is a great tool to have at your disposal. Often, realtors will request that a buyer receive a pre-qualification before they show you houses. Realtors don’t want to show homes that are unobtainable for their clients. Think of it as saving both their time and yours! Having a pre-qualification also strengthens your offer to a seller, showing that you are a serious buyer with financing to back it up.
Sounds like a good idea, how do I do it? Easy, just gather your information, and reach out to your lender. They can pre-qualify you and there are no cost involved!
What information should I have ready? Here are a few of the items you can expect to potentially discuss and speak to for yourself (and any potential co-applicant) when getting pre-qualified with a loan officer.
- Photo ID
- National Insurance Card
- Name, address, and phone number of your employers for the last 2 years
- Proof of current income (most recent 2 months paystubs)
- Proof of Residence
- Last 2 years of income statements or paystubs
- Assets (checking and savings accounts, real estate, etc.)
- Statements of existing loans and obligations (mortgages, car loans, personal loans, etc.)
Fill out our pre-qualification questionnaire and we can assist with referring you to a lender.