On this episode of the Steve Talks Real Estate Show we talk about what banks and lenders actually look when qualifying people for a home loan. In general most lenders will be looking at the same things talked about in this video! If you have any specific questions, feel free to reach out!
Pre-qualification vs. Pre-approval
A mortgage pre-qualification can be useful as an estimate of how much someone can afford to spend on a home, but a pre-approval is much more valuable. It means the lender has checked the potential buyer’s credit and verified the documentation to approve a specific loan amount (the approval usually lasts for a particular period, such as 60 to 90 days).1
Potential buyers benefit in several ways by consulting with a lender and obtaining a pre-approval letter. First, they have an opportunity to discuss loan options and budgeting with the lender. Second, the lender will check the buyer’s credit and unearth any problems. The homebuyer will also learn the maximum amount they can borrow, which will help set the price range. Using a mortgage calculator is a good resource to budget the costs.
