Get Pre Qualification or Pre-Approval for a Mortgage

After you have done your research, the next step is to request a pre-qualification from the lender of your choice. The lender may pre-qualify you for a single family, condominium, or a multifamily. Each pre-qualification will tell you what the bank will lend you to acquire the specific property type. Once you have this information, look back at your budget and determine what you can afford to spend.

In addition to your financial information, the lender will request your employment history. Most lenders like to see that you have worked at least 2 years in the same place or in the same occupation. You should have the contact information for your current employer available.

The pre-qualification is not a guarantee that you will get a mortgage. It is an estimate of what you can borrow depending on your circumstance at the time of purchase and the property that you are planning to borrow. So, if after your pre-qualification, your debt increases, your savings decreases, your income changes, or you switch jobs, you may not qualify for the same mortgage. Once you are pre-qualified, the only financial moves that you should make are increasing savings and reducing debt.

If you are planning to purchase within 90 days, it might be wise to be pre-approved for a mortgage. Pre-approval requires a more in-depth review of your finances than a pre-qualification and provides a more accurate view of what the lender will give you for a mortgage. The process is very similar to completing the mortgage application except you do not have a property yet. The pre-approval is a promise from the bank to give you a mortgage when you find a property. Once again, you need to review the amount that the lender is offering in relation to your budget. Overspending your budget will cause problems later on.