All you need for a mortgage loan prequalification
Buying a house may be a tedious process, but every step of it is worth it. Finding the right home is quite a tiring task. But the real work begins once you put an offer on a home of your choice. Most renowned lenders require you to go through a mortgage loan prequalification, which usually does not hurt your credit score to get to the next step of getting the right interest rates for yourself.
Why do you need to undergo a prequalification?
The mortgage market is filled with choices. If you have a decent credit score, you will have the option of choosing any mortgage lender that you like. However, the reason why you should undergo a mortgage loan prequalification is to find out the best-suited rates and also to get an idea of what different lenders offer.
What details must you fill in order to get a prequalification?
Every major lender gives you an option of mortgage loan prequalification on their portals. You may fill the online application form and find out if you are prequalified or not. Generally, the details that you need to provide for this are:
- Loan purpose: You need to tell the lender whether you need a mortgage for a refinance or for a purchase.
- Bank account: Most lenders ask you the name and branch details of the bank you have an account in.
- Loan type: There are plenty of loan options in the market ranging from 30-year fixed mortgages to 15-year fixed mortgages along with adjustable rate options. Pick the one that suits you the most. (This may be adjusted later if some other mortgage option suits you better.)
While the aforementioned criteria are necessary to fill, here is a checklist for you to verify for prequalification and qualification:
- Your details: Name, date of birth, phone numbers, email address, mailing address, Social Security Number of the applicant and co-applicant (These may slightly differ from lender to lender.)
- Income and employment details: Your tax returns and employment details which differ for W-2 wage earners, self-employed and freelancers, and for people with real estate income.
- Assets: Your bank account statements along with information on retirement and brokerage accounts.
- Debts: Your list of existing debts which may either be monthly debt payments or real estate debt.
Additionally, you may require rent documents, divorce-related documents, bankruptcy declaration, foreclosure proofs, or down payment gift letters.
Getting a loan prequalification is very easy on online portals as long as you give the right details so that the lender may access your data and make a calculated decision by granting you a prequalification.