How Much Do I Qualify For?

Prequalifying for a mortgage should be your first step in getting a home loan.

• You can save thousands of dollars when you are negotiating with a property seller when you pre-qualify.
• Buyers who are pre-qualified are given preference over others in multiple offer situations.
• You need to pre-qualify to get real estate agents to work with you.
• Pre-qualification will help you apply for a loan within the correct price range.

Once you are pre-qualified and have sent in your application, you will get a "Pre-Qualification Letter". If you have decided on purchasing a home it will help you to settle on the precise closing date.

Prequalifying for a mortgage is simply a matter of a lender crunching these numbers to tell you how large a mortgage you'll qualify for based on those ratios. Remember, what you qualify for may not be what you can afford--only you can determine that after examining your own budget and lifestyle. Because the lender has not verified your income or examined your credit report, prequalification promises you nothing; it simply tells you how much mortgage you might get.

• Steady employment history, at least two years with the same employer.
  
  
• Consistent or increasing income over the past two years.
  
  
• Credit report should be in good standing with less than two thirty day late payments in the past two years.
  
  
• Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.
  
  
• Any foreclosure must be at least three years old with good credit for the past three years.
  
  
• Mortgage payment qualified for must be approximately 30 percent of your total monthly gross income.
  
  

If you can answer YES to these statements you should have no problem qualifying for an FHA home mortgage loan.

While prequalifying for a loan doesn't necessarily guarantee that you will be able to purchase the home of your dreams, it does help you and potential lenders know your borrowing power and what you can afford in terms of a monthly mortgage payment. Prequalifying for a loan simply means that you have taken an inventory of your income and assets and submitted them to your potential lender. Based on that information you should be able to qualify for a home mortgage loan.

What Loan Is Best For "ME?"

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