The Prequalification Process
Mortgage prequalification is a quick first step in the homebuying process. By sharing basic financial information, a lender can estimate how much you may be able to borrow, helping you shop with confidence and set a realistic budget
Prepare Yourself Properly
Getting pre-approved is one of the most important steps in the homebuying journey. It’s a simple process that gives you a clear understanding of your buying power and shows sellers you’re a serious, qualified buyer. To get started, you’ll provide a lender with basic financial information which includes things like income, employment history, assets, debts, and your credit score. The lender reviews these details and calculates what you can comfortably afford, along with an estimated monthly payment. Once everything is verified, you receive a pre-approval letter that outlines your approved loan amount..
This letter becomes a powerful tool as you begin your home search. It helps you shop with confidence, knowing exactly which homes are within your reach, and it gives you a competitive edge when you find the right property. Sellers prefer working with pre-approved buyers because it reduces uncertainty and speeds up the closing process.
We’ve worked with several lenders over the years. When it comes to selecting your lender you want to go with someone you can trust to get you to the finish line on time. Our team is happy to tell you about our experiences and provide you with a recommendation for a lender who competes.
The 3 Step Process
Gather Your Financial Information
Before starting the pre-approval, you’ll need a few basic documents. Most lenders ask for recent pay stubs, W-2s or tax returns, bank statements, and details about any debts you carry. Having these ready upfront helps speed up the process and gives your lender an accurate picture of your financial situation.
Submit Your Application
Once your documents are ready, you’ll complete a mortgage application—either online, over the phone, or in person. This application gives the lender permission to review your credit and verify your financial information. It’s a straightforward process and typically only takes a few minutes.
Credit Check & Income Verification
Next, the lender reviews your credit report, income, employment history, and debt-to-income ratio. This helps them determine your level of financial stability and what type of loan programs you may qualify for. A strong credit profile can open the door to better interest rates and more flexible loan options.
Are You Ready To Buy?
Take our buyers preparation quiz and find out!
Did You Know?
A pre-qualification and a pre-approval are not the same thing. A pre-qualification is an estimate of what you might be able to afford. A pre-approval is a deep dive into your financial situation and gives sellers confidence that you’ll be able to get to the finish line without delays.
Have You Heard?
Many agents will require that you complete a prequalification before showing homes. This is a great way to signal that you are serious and ready to move forward should you find the home that fits all your needs and wants.
Ready To Receive Listings?
Select your budget and the city that interests you to receive regular emails as homes that fit your description hit the market.
What Does It Cost To Hire A Red Penny Realty Agent?
Our buyer’s agents negotiate their own commission structure with each client on every transactions.
Did You Know?
You can request that the seller pay for the cost of the buyer’s representation as a part of your offer!