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

April 15 2021

How to Get a Mortgage When You're Self-Employed

Here are a few things you need to consider to land the best possible mortgage when you're self-employed.

Read More

April 07 2021

3 Surprising Refinancing Mistakes

When refinancing, be careful to avoid some pitfalls and traps that could cost you money in the long run. Here are some of the most common mistakes people make when they rush to refinance.

Read More

March 31 2021

10 Unexpected Spring-Cleaning Tips

Keep your home in the best possible shape with these surprising life hacks.

Read More

March 23 2021

Tax Season Tips for Homeowners

If you're a new homeowner, you might be wondering how homeownership affects your taxes. The answer is: It depends on one big thing—will you be itemizing your deductions or claiming the standard deduction?

Read More

March 11 2021

A Virtual Homebuying Helper: Lennar Homebuying Seminars

Online webinars are making it easier than ever to help buyers get educated and take the first steps toward their dream of homeownership.

Read More

March 04 2021

What is Mortgage Insurance?

Mortgage insurance may seem like just one more painful added expense when considering buying a home and how much you can afford. And it's true, private mortgage insurance, or PMI, does increase your monthly payment

Read More

February 25 2021

What to Expect on your Path to Homeownership

Our Digital Mortgage Experience is a modern mortgage application with a personal touch! We’ve designed our Digital Mortgage experience to make things easy, intuitive, and efficient; which gives us the ability to be with you through the entire process- from...

Read More

February 18 2021

How to Get a New Construction Loan

Tips and steps for buying a new-construction home.

Read More

February 11 2021

What's In Your Monthly Mortgage Payment?

Understanding Mortgage Insurance, Escrow, and Supplemental Home Costs

Read More


Mortgage Calculators

Crunch the Numbers With Our Helpful Mortgage Calculators

Payment Calculator

payment calculator


Affordability Calculator

affordability 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?