Why Should I Get Prequalified For A Home Mortgage? Part 2

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Why Should I Get Prequalified For A Mortgage? Part 2:

Why Prequalify for a home mortgage?

In addition to your gross monthly income, lenders review your employment history, stability, and potential for increasing your income. They also evaluate any additional income, such as bonuses, commissions and child support. They will request a credit report to verify your debt repayment, outstanding debt, and available credit. They will calculate your assets, including checking and savings account balances, CDs, stocks and bonds. Avoiding any late payments on credit accounts, and limiting your credit purchases, helps keep your credit report in good standing. If you have items on your credit report that could negatively influence your ability to secure a mortgage, be prepared to explain each situation in writing. You should also consider delaying major purchases until after you've moved into your new home.

3. Closing costs. Closing costs typically range between 2 and 5 percent of your loan amount. These fees are due in cash at the time of closing, or, in some cases, can be included in the loan.

Pre-qualification is always a good idea. Taking the time to pre-qualify for a mortgage before you begin your home search will put you in a much better negotiating position: your pre-qualification assures the seller that the transaction will not be delayed while you secure financing.

Why Should I Prequalify for A Mortgage?, Part 1
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