Pre-Qualification
Before going to look at homes, it is important to determine how much home you can afford to buy. The prequalification process is easy and free. Just contact a Mortgage Loan Officer and they will walk you through the process. If you have not yet selected a mortgage company, I will provide you a list of loan originators with whom I have had successful relationships in the past, or you may pick your own.
You can expect questions about your income and length of time on the job, outstanding loans, child support and alimony payments and the source and amount of money you plan to use for down payment and closing costs. The mortgage company will also check your credit scores. If you have had credit problems in the past or if you are currently self-employed, a little more in-depth analysis is needed, but it is not necessary to have absolutely perfect credit in order to buy a home. It is extremely important to answer all questions frankly and honestly, because all the information you give will be verified during the actual mortgage approval process.
The most important reason for this prequalification process is to keep you from looking at homes that you cannot afford and then being disappointed. Your qualification to buy a particular home can be based on many things, such as minimum down payment and closing cost requirements, income to qualify for a particular payment level and prior credit history. Typically each of these criteria has a bearing on housing affordability, but each item is weighted differently according to your own personal situation. How much rent you are currently paying is not nearly as important as how promptly the rent has been paid.
An important reminder: if you are serious about buying a home, from this point forward, do not borrow any money or buy anything on credit. Doing so now can prevent you from buying a home. Once you have bought a home you can buy anything you want because you will be a HOMEOWNER.
