What is a home loan prequalification...And how do I get it?
A home loan prequalification is an estimate of how large of a mortgage you can afford based on your financial situation over the past two years. For serious homebuyers, it represents an important first step that is often overlooked.
“It’s crucial to know where you stand before setting your sights on a ‘McMansion’ you just can’t afford,” advises Erin Lantz, Director of Zillow Mortgage Marketplace. “Prequalification helps you narrow down your options and focus on how much house you really can manage.”
Without preparation, many buyers get lulled into the mistaken notion that if a lender prequalifies them for a mortgage, this means they have been pre-approved for a home loan—but there’s a world of difference.
- Provides an estimate of your borrowing power
- Can be completed online
- Is based on information you provide about your income, assets and sometimes credit check
- Does not require a commitment from you
- Offered by most lenders at no cost
In the market to purchase a home, but not sure what you can afford? Northwest can help. Simply complete our prequalification application online or in one of our offices — and we will review your credit history, determine an affordable payment and send you the results.