KNOW HOW TO PRE-QUALIFY
by Jeremy Hollingshead -

Pre-qualifying for a mortgage involves contacting a lender - such as a broker, correspondent bank, direct lender, savings & loan, credit union -completing a loan application, Form 1003 and checking your credit.  Inside the credit application you will be asked information such as your income, employment history, housing history, assets, credits, liabilities, etc.

Basically, a completed loan application is going to include all the information about you that is necessary to warrant a decision as to whether or to to lend you money.  The credit report pulled will confirm liabilities and infer through your credit scores your ability to pay back debts.

If based on this information you are pre-qualified for a mortgage, you will be required--depending on the approval's guidelines--to provide supplemental paperwork that will validate the claims you have made on the application --W2s or 1099s, bank statements, verification of rent or mortgage, etc...With a complete application a competent loan officer can have a pre-approval within an hour.   A pre-approval is the next approval stage above pre-qualifying, in this stage you actually provide documentation to prove what you verbally provided on your loan application.

It is very important to represent your personal situation on the application accurately.  For example if you make $3,800 in income per month, do not round up to $4,000 simply because it is easier to say, sounds better, or is a "clean" and easy number.   Doing so can result in a pre-qualification that is later denied.  If you are forced to estimate, under-estimate your income and assets, and over-estimate your liabilities so there are no unpleasant surprises. 

In conclusion, your time will be well spent if you make this process the first on your list when starting the search for a new home.  Not only will you be satisfied in your ability to purchase a home, but the real estate agent representing you will be confident in representing you as a "prepared, approved and educated" buyer.

As each individuals situation is unique, you should always council with a mortgage professional to have your specific needs addressed. 

To have your questions answered, or to receive more specific information, you can contact Jeremy Hollingshead at 673--6006 or jeremyh@first colonymortgage.com . 

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