How do I prequalify for a mortgage?
Here’s how to prequalify for a mortgage, an important first step in seeing where you stand financially as you prepare to buy a home.
Mortgage prequalification is an estimate of how much money you’d likely be able to borrow for a mortgage. It lets you better plan your home search by knowing how much money you have to spend.
How do you get a mortgage prequalification?
You talk with a lender — often over the phone or online — about your debt, income and financial assets. You should be ready to provide the following:
Based on the information you give, the lender provides you with an estimate on the amount of a mortgage available to you. In other words, you can see how much money you could borrow toward a home.
How long does getting prequalified take?
You usually get an answer within hours — or even minutes — of applying. There shouldn’t be any fees, nor does your prequalification expire. It’s a quick, easy way to know how much home you can afford.
How is a mortgage pre-approval different than a prequalification?
With a prequalification, the lender does not verify any of your information and does not do a deep dive into your finances. The results, therefore, should be considered a ballpark figure that helps you determine how much you can spend on a home.
A pre-approval is a much lengthier process that includes an in-depth review of your current financial situation and credit history. You’ll need to demonstrate steady employment, sufficient income to make your monthly mortgage payments and a healthy credit score.
With a pre-approval, once a lender has reviewed your finances (which can take weeks), he or she will certify that, based on the assessment, you qualify for a loan from his or her institution for up to a certain loan amount. That certification will be good for a certain time period (typically 90 days) and can often be renewed.
How to get a mortgage: You’ll eventually need to get pre-approved
Once your home search heats up and you’re serious about getting a mortgage, you’ll eventually need to get pre-approved. A pre-approval proves you have the resources to make a home purchase and helps you act quickly when you find the perfect home.
But, if you’re just beginning your search, it makes sense to start by getting prequalified so you see where you stand. You can learn how to get a mortgage later.
Ready to find your dream home? See if you prequalify.