How to Pre-Qualify for a Mortgage

February 19th, 2007

Not everyone qualifies for a mortgage and not everyone qualifies for a good mortgage. What exactly is pre-qualifying for a mortgage? Pre-qualification is an assurance by the lender, which they receive in the form of a letter or a certificate, that states the maximum amount of loan you can qualify for. Mortgage companies can pre-qualify you without actually doing any business with you in the future. If you already pre-qualify you can save a lot of money on your mortgage.

Usually you can go online and pre-qualify for a mortgage without paying a fee. You will have to fill out an application that looks like you are applying for the mortgage; this is because they need all the same information in order to pre-qualify you. Pre-qualifying for a mortgage follows the same guidelines as trying to qualify for a mortgage. It will rate your credit score, your debt ratio and your monthly income to figure out how much of a mortgage you can afford. You can find mortgage calculators online that will help you figure out how much of a mortgage you can pay, and these are what companies will use to pre-qualify you for that mortgage.

Once you pre-qualify you can decide to go ahead and apply for the loan you already qualify for. Since you have pre-qualified you will save money in the form of paying a lower interest rate. Pre-qualifying for a mortgage shows companies that you are not a risk and they can better create a mortgage that fits your needs. Pre-qualifying for a mortgage is a good idea if you are in the market to save money on your mortgage.

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