Getting Pre-Qualified can make the difference in getting your offer accepted.
Before you think of buying a home there are lots of things to consider when taking those first steps. The task of pre-qualification can seem daunting at first, but understanding the necessary steps can make the home-buying process go a lot smoother.
The pre-qualification process is a fairly easy one. Ultimately it will give you a ballpark idea of how much a banking institution will loan you so that you can qualify and ultimately shop within your price range. Pre-qualification is a quick and easy way to find out. A Loan Officer will ask you about your income, assets, debts and the amount you want to spend for down payment, anticipated credit history and then calculate what kind of loan you’d likely qualify for (Conventional, FHA, VA, USDA, etc.) The pre-qualification process is designed so that borrowers can “try on for size” a mortgage payment. Some questions you may want to sit with are – “Even though I qualify for this amount, is this how much I want to spend?” or “What do things look like for me in a 2-5 years?”, etc. Home buying is a serious and exciting step in anyone’s life!
At this point, your credit will be pulled to ensure proper pre-qualification. Below is a general list of items your Loan Officer will ask for, but know each circumstance is unique and they may require additional documentation:
- • Most recent paystubs showing year-to-date income
- • 2 years’ most recent W-2s
- • 2 years’ most recent Federal tax returns
- • 2 months’ most recent asset statements (checking, savings, 401Ks, IRAs, etc.)
Gathering this documentation up front for your Loan Officer will enable them to properly evaluate your income and assets to help alleviate bumps in the process later down the road. It may seem like a lot, but in the end it will be invaluable to you. Once you’ve been pre-qualified you are fully able to shop for a home knowing you’ve done your due diligence regarding mortgage financing!
If you aren’t already working with a Realtor, your Loan Officer is a good resource to match you with a Buyer’s Agent who will fit your needs location-wise and personality-wise. Most realtors have an area of town in which they specialize. Working with a Realtor who knows which area of town in which you want to purchase is key. They will know the ins and outs of the real estate market which can help you ultimately purchase your perfect home. Providing them with a “wish list” of what you want in a home and your price range so they can be a true asset to you is incredibly important. Even the simple things such as walking distances to a coffee shop, restaurants, schools, a dog park, or a grocery store are very important criteria when creating your list.
Your Loan Officer and Realtor will work in conjunction to provide their expertise and assistance throughout your home buying process to make sure it’s a clear, concise and smooth process. Home buying and moving can be one of the most stressful experiences. Summit Mortgage Corporation is a smaller, local company that can provide you with as much hand-holding or autonomy as you desire. Whether this is your first home purchase, or your 10th purchase, we can help guide you to your home buying goals.