If you are thinking about buying a home you have probably heard one of these terms, prequalification or preapproval. As far as buying a house goes these two words mean the same thing. This should be the first step that you take when starting your Path to Homeownership.
Getting preapproved or prequalified for a mortgage may seem complicated but it is not. You can get this done quickly with the right lender.
To help you understand the process of getting preapproved or prequalified for a home loan I asked my friend Jake the Mortgage Guy at Liberty Home Mortgage to make a short video for you.
What is a Preapproval or Prequalification?
This is simply a document that you receive from a lender that says you can buy a home. The Preapproval or Prequalification letter will have a dollar amount on it that you cannot exceed.
The preapproval or prequalification letter will also state what type of loan you are qualified for, FHA, VA, USDA or Convention.
Steps to Getting Preapproved or Prequalified
- Credit Check
This is to verify that your credit scores meet the minimum requirements for the type of loan you are trying to qualify for.
All lenders are different but in general you can get preapproved for a loan with a score of 580 or higher, some lender can work with scores as low as 500.
- Verify Income
This will require some documents to show proof of income.
- Pay stubs for the last 30 days
- W2’s for the last two years
- Tax returns for the last two years
We are referring to your money you have available to you to pay for the down payment, inspections, appraisals and closing costs.
You will need to verify this by providing your lender with the last two months bank statements.
- The Property
The lender will have to verify that the property is within the price range that you have qualified for your purchase.
Getting preapproved or prequalified for a home loan is that simple. Get your documents ready and give Jake the Mortgage Guy a call today!
Once you get your mortgage and close on your home be sure to check out my book “You Can Be Mortgage Free” so you can save thousands of dollars on your mortgage.
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