You have made the decision to buy a home but not sure where to start and have a ton of questions.  The first step is to understand how much home you can afford and get prequalified with a lender.  All that sounds really scary, but it isn’t.  Below are steps on how to get pre-qualified.

Step 1: Find a Lender

Sounds easy enough. There is a bank, lenders, mortgage companies on every corner.  Ask your friends and family if they have a recommendation.  More than likely someone you know has bought a home and had to get a loan.  Lenders vary and you want to make sure it is someone that is fair, ethical and understands your needs in a home purchase.

Step 2: Meet with the Lender

Your meeting with the lender will include questions about the home that you want and where you want to live. Then here is where the fun will begin! The lender will ask you questions about your job(s), income and expenses. Depending on your situation, this may lead to more questions.  For this first meeting, make sure you understand your monthly income and expenses.  Also, have on hand information about other sources of income (investments, side jobs, etc.)  The lender will go over with you their loan programs and what they have to offer.

Step 3: Credit Check

The prequalification is an estimate of what you can qualify for as a preliminary evaluation.  This does involve a credit check which will determine your interest rate.  From this, the lender will be able to tell you how much you prequalify for.

This process can be done online or face to face with a lender.  Since this involves a credit check, only get one prequalification from one lender.  You want to make sure to keep the ‘hits’ on your credit at a minimum at this point.  At this stage, the lender will be able to inform you if there are any steps that you may need to take to bump up your credit score.  This prequalification will be in a form that you can share with your Realtor to start the home search.  You will be armed with how much you can afford and the estimated monthly payments.  

If you are looking to buy a home in the near future, feel free to give one of our Realtors a call and we can discuss your home search. We can also assist you with how to get pre-qualified.