BlogHomebuyingFinancial IQ November 17 2020

How to Get Pre-qualified for a New Home Loan

It’s easy to get swept away in the process of looking for your dream home. Most of us are so focused on finding a house that ticks the boxes on our wish list that we forget one of the most important steps: finding out much we can afford to pay.

This is where getting prequalified for a mortgage comes in. Although the terms are sometimes used interchangeably, there are some key differences between a pre-qualification and a preapproval from a lender.

What is a Pre-qualification

A pre-qualification is a more general, less in-depth process and does not require a formal loan application. You provide the lender with basic information about your income, assets, and debts, and the lender performs a credit evaluation, giving you a ballpark estimate of what kind of mortgage you can afford.

Its function is more to help a buyer understand what kind of loan they would generally be eligible for, but it is not a guarantee.

Why Bother?

Finding out what kind of loan you qualify for can be a very helpful exercise when home buying because it automatically helps buyers zero in on a budget. Houses beyond that pre-qualification limit are no longer an option, and this can help take some of the emotion and price creep out of the buying decision. A pre-qualified buyer is also more attractive to a seller than one without any pre-approval or pre-qualification.

How to Get Pre-qualified

  1. Tally your annual income. This includes all income—dividends, interest, side hustles, rental income, anything that can be verified. The more income you can document, the larger the loan you can qualify for.
  2. Choose a mortgage term and rate. Although you will not be “locked” or guaranteed, this will give you a good estimate of what your loan will cost you each month.
  3. Gather and decide on how much money you can afford to put down as a down payment. This will impact your final loan amount.
  4. Total up your other monthly debt payments. This includes things like car payments; this helps lenders understand how much debt you’d be able to carry.
  5. Estimate the monthly property tax and homeowners insurance on the properties in your price range. This is included in your monthly mortgage payment and helps you calculate how much you can afford.

Once you’ve gathered this information, you’re ready to calculate an affordable monthly payment and determine what kind of loan you are eligible for.

Online pre-qualification calculators make it quick and easy to help you figure out if your dream home is an affordable fit for you. At Eagle Home Mortgage, we believe that an educated buyer is the very best kind. We walk you through the loan pre-qualification process so you can have an accurate picture of your eligibility and feel confident in securing a loan that makes your dream home a reality.

Search Results for query

January 22 2021

Budget Hacks: 4 Easy Ways to Free up Money to Help You Save

You've already cut and sacrificed, but saving seems out of reach? Here's where to find that extra money to sock away.

Read More

January 14 2021

3 Easy Interior DIY Projects to Increase Your Home Value

With a small amount of money and a little elbow grease, you can create a home that buyers bid for.

Read More

January 08 2021

FHA Loan Limits for 2021

Read More

December 23 2020

4 Easy Ways to Clear Clutter for the New Year

Here’s how to get past the failed resolutions and good intentions with some fool-proof, actionable steps to clear clutter for the new year.

Read More

December 17 2020

How Much Down Payment for a House is Enough?

The typical down payment on a home depends on your income, eligibility, and goals—and finding the mortgage that fits best. All too often, the excitement of finding a home you want to buy comes first, followed by the bubble-bursting question of “can I...

Read More

December 09 2020

Eagle Home Mortgage is Now Lennar Mortgage

What’s in a name? A smoother, more efficient home-buying experience. What’s in a name? A smoother, more efficient home-buying experience.

Read More

November 17 2020

How to Get Pre-qualified for a New Home Loan

These easy steps will help you find out what you can afford to be ready to buy.

Read More

November 06 2020

Surprising Facts About VA Loans

A VA loan can help eligible veterans purchase the home of their dreams, but they come with a few conditions a buyer should understand.

Read More

October 21 2020

What is an FHA Loan?

For borrowers with tight cash or tricky credit, an FHA loan can be the answer. But not every situation is a good fit for these mortgage loans. Find out if one is right for you.

Read More

12345Last

Mortgage Calculators

Crunch the Numbers With Our Helpful Mortgage Calculators

Payment Calculator

payment calculator

Payment
Calculator

Affordability Calculator

affordability calculator

Affordability
Calculator

Refinance Calculator

refinance calculator

Refinance
Calculator

The Modern Digital Mortgage with a Personal Touch

Paperless. Effortless. Awesomeness TM

Simplify the home financing process with our Digital Mortgage. We'll be here to help navigate you through the entire process.

Get Pre-qualifiedWhat is a Digital Mortgage?