How to Get Pre-Approved for a Mortgage
It sounds simple: Search for a house, get a mortgage, buy house, success! But to help dispel the myth, firstly one should investigate mortgages before diving into the house listings—that way you know what financial resources you’ll have, what price range you can aim for, and you can avoid many potential surprises that might pop up on the financial side.
The reason for this is because it prepares you for what homes you can buy, and it also helps ensure that you don’t get caught by a surprise denial for a mortgage. Few things sting as badly as finding the house of your dreams only to realize you can’t get the money to buy it.
General Qualification Requirements for a Mortgage
You only need to finalize getting the mortgage after having decided on a house and making an acceptable offer to the home seller. But before all that, you need to first see if you can qualify for a mortgage at all and what you can qualify for. This process of seeing if you can qualify for a mortgage at all is known as the pre-qualification process. One way to do this is to use a Mortgage Calculator to give you a rough idea of if you qualify. But when you’re ready to formally qualify, that’s when you seek to get pre-approved.
Probably one of the most frequent reasons why anyone refinances their mortgage is because they’re looking to reduce their interest rate. This does rely on mortgage rates being lower than when you initially took out your mortgage, but it can go a long way to reduce how much you’d be paying every month. However, it is worth noting that refinancing will reset the time on your mortgage unless you opt for a shorter term.
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How Strong Would Your Case Be in Court?
When discussing with your personal injury lawyer about the strength of your case, you’ll want to ask your lawyer about their insights into similar cases like your own and what kinds of outcome they would expect from your situation. You’ll also want to ask your lawyer also about how your evidence holds up against whatever evidence the defendant and their insurance company may have. These questions can help you determine what the strengths and weaknesses of both sides may be and how easy or challenging it may be taking the case to court.
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How Much is Your Case Worth?
The next topic of discussion should be the money and damages that are involved. You should discuss with your attorney about what they think your case may actually be worth, what minimum amount you would accept, and also what the defendant has in regard to money and their own insurance coverage. Together, all these factors can determine whether it’s worth pursuing a case in court or to accept the settlement amount.
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Concerns and Matters to Think About
Other factors that you may want to consider before deciding on taking your case to court:
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Job History
A mortgage provider may look at how long you’ve been working at your current job or at least in your field of work. It should be expected that they’ll be looking to see if you’ve spent at least 2 years in your line of work, if not with the same employer. This is to make sure that your source of income is likely to be steady—steadily employed means steady and reliable payments.
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Credit History
Different mortgage providers may have different credit score minimum thresholds, so do what you can to improve your credit score before you begin the homebuying process.
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Verifiable Income
You may be asked to provide proof of income, such as tax returns and pay stubs from work. You should expect them to ask for up to two years of income evidence.
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Rental History
If you’ve already been renting, they might ask for a record of your rental history to prove that you are reliable when it comes to making payments on time.
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Financial Assets
This is to see if you have enough in finances to cover things such as closing costs and down payments. But they might also assess your finances to see if you have enough to cover a certain number of months in mortgage payments ahead of time.
These are just the basic requirements that a mortgage provider will likely be assessing to determine your eligibility for a mortgage. Should you fail at any of these, they will likely deny you a mortgage and you will have to either look elsewhere or take measures to remedy whatever is missing.
Getting a denial isn’t the end of the world—always remember that no two mortgage providers are the same. If you have a co-signer, getting officially qualified for a mortgage might be easier as well.
What Happens Next?
A pre-qualification is a good first step! A pre-qualification is good for giving you an estimate on whether you qualify for a mortgage, which can be a good sign of whether or not you should begin your house searching. But after that, once you’ve found a home that you’re set on, you’ll need to get pre-approved so that you can show off your letter of pre-approval when you begin a dialogue with the home seller. A lot of home sellers want their potential buyers pre-approved because a pre-approval letter is proof that a bank is confident about you and is willing to fund you.
Make Sure You’re Getting the Best Mortgage for Your Dream Home with TopResearched!
Once you find the house you truly want, before you rush out the door to apply for a mortgage, you should always remember the rule that “no two mortgage brokers are the same”. But finding the right mortgage broker can take hours to days of research while your house possibly gets nabbed by another potential buyer. TopResearched helps you save time by providing you the top mortgage providers in and around your local area. Our researchers use a stringent set of rating criteria to collect and filter the best mortgage brokers out there until we have only the very best for you to choose from. With our heavily curated lists, you’ll only ever see the mortgage brokers that we would trust ourselves!
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