Mortgage prequalification is one of the first steps to take when considering to buy a house. It lets you know if you meet the minimum requirements to obtain a loan and its period. Basically, it is an essential step in the homebuying journey, especially if you are unsure of your homeownership’s financial readiness. Besides, it is also an avenue to know the various mortgage options that best fit your goals and needs.
The process of prequalification is dependent on the user you submit as a consumer. That is, as a borrower, the data you submit to your lender is solely consequential to determining/knowing how much such a lender can lend you.
Nonetheless, the prequalification process is quite quick and straightforward – it can be as quick as a phone conversation. The information needed includes your basic finances, such as assets, debts, and income.
Are you unsure of what to discuss with a lender? Try out a Prequalification Calculator!
With the prequalification calculator, you will be sure to have an idea of what to expect even before you discuss it with a lender. A calculator takes a look at back-end DTI (debt-to-income ratio) and also considers a few more aspects of your credit profile, including credit score, down payment, and employment.
To use a Prequalification calculator, you need to provide the following information: