Your Mortgage Prequalification Checklist – What You’ll Need
Buying a home involves more than just finding the right property. It starts with getting financially prepared, so you know what you can afford and what to expect throughout the process. Use this checklist as a guide as you move through prequalification and prepare for a mortgage.
Mortgage Prequalification Basics
Mortgage prequalification is an early, informal step where a lender reviews your basic financial information and provides an estimate of how much you may be able to borrow. It is based on self-reported information such as income, assets, debts, and employment. In many cases, it may include a soft credit inquiry that does not impact your credit score.
Remember, pre-qualification is not loan approval. It is simply a starting point to help guide your home search.
Prequalification Checklist
- Gather your financial documents
- Include recent pay stubs, tax returns, bank statements, and a list of your debts and assets
- Connect with a lender or loan officer
- Provide your financial information to receive an estimated loan range
- Review your prequalification estimate
- Use it to understand your general budget and price range for home shopping
- Start thinking about your full homebuying budget
Consider how much you want to put down, along with closing costs, moving expenses, and any home improvements
Financial Preparation Checklist
- Keep all credit accounts current
- This includes mortgage, rent, auto loans, student loans, credit cards etc.
- Continue making all payments on time
- Even accounts you plan to pay off should remain current throughout the process
- Avoid new debt or new credit applications
- Do not open new credit cards or take on large purchases such as vehicles or major financing
- Avoid unnecessary credit inquiries
- Additional credit pulls can negatively impact your credit score during the mortgage process
- Keep employment stable
- Avoid changing jobs, quitting, or starting a new business while actively pursuing a mortgage
- Keep bank accounts stable
- Do not switch accounts or transfer large sums between accounts without documentation
- Keep copies of all financial records
This includes pay stubs, full bank statements, and records of paid bills
What Your Loan Officer Can Help With
- Calculate your debt-to-income ratio
- Helps determine how much you may qualify to borrow
- Review down payment assistance options
- Can help identify programs you may qualify for
- Break down total home buying costs
- Including monthly payments, taxes, insurance, and other expenses
- Guide you through loan options
Including solutions for buying and selling at the same time if needed.
Next Step
In Conclusion
Mortgage prequalification is the first step in building a strong foundation for your home purchase. When you stay organized financially and understand what lenders look for, you put yourself in a better position to move forward with confidence.
All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Other restrictions and limitations apply.
These articles are for educational purposes only and provide general mortgage information. Products, services, processes and lending criteria described in these articles may differ from those available through Union Savings Bank. For more information on available products and services, and to discuss your options, please contact a Union Savings Bank loan officer.