Why Get Pre-Qualified
Why?
Naturally you want to get the best deal for the least amount of money. A lower interest rate means a lower monthly payment, which can save you hundreds, even thousands of dollars in the long. And it’s easier to qualify for a lower payment than a high one.
Begin your shopping with confidence by knowing what you can afford and deciding if that’s how much you would like to spend. Most people believe they have perfect credit, but often there is something in their credit report they are unaware of. By starting early, you will have plenty of time to investigate your report and clear up any unexpected items. Having a pre-qualification letter from a lender gives your offer as a buyer more value than an offer that does not contain a pre-qualification letter.
How?
Things needed at loan application include:
1. 2 years of residency
2. 2 years of Employment
3. social security number
4. VA – certificate of eligibility DD214 (If you have ever been in the military)
5. 2 years of tax returns (If you are self employed)
6. bank account numbers and addresses
7. any monthly debt
8. car loan account numbers and addressess
9. credit card numbers
10. child support / day care
11. divorce decree
12. lease agreements / rents
13. mortgage account numbers
14. current pay stubs
15. driver’slicense
Here’s what lenders must analyze as they consider a loan request:
1. Based on your earnings and debt, lenders calculate your approximate borrowing limit. Mortgage payments, property taxes, hazard insurance,etc. should not exceed 28-30% of your gross monthly income;these are known as housing expenses.
2. All other debts such as car payments, student loans and credit cards are then added to your housing expenses. This sum should not exceed 36-38% of your monthly gross income. If it does, don’t panic, it probably will only reduce the amount of mortgage for which you may qualify.