Related Sponsors

How do I get prequalified and preapproved for a mortgage?

Home » Real Estate » Mortgage Prequalification and Preapproval » How do I get prequalified and preapproved for a mortgage?

Mortgage prequalification is really a guide for you, so you might want to get prequalified when you're just beginning to browse the real estate market. You may not even be sure that you want to buy a home, but you want to begin comparing home prices to what you might be able to afford.

You probably want to contact your bank (on the phone or in person) in order to prequalify for a loan, but you can also prequalify online with a corporation such as Quicken. The lender will ask you a series of questions regarding your income, assets, and debts, and may provide you with a estimated loan figure within minutes. This figure is just a guide, so it's generally accurate until your financial situation changes.

On the other hand, you should seek mortgage preapproval after you have decided you want to purchase a home but before you place a bid. You may or may not have searched the market a fair amount, but definitely get preapproved before you sign a purchase agreement so that you know you can afford the bid.

Contact a lender from which you think you might want to borrow and ask to begin the loan preapproval process. You'll need to go meet with the lender in person and fill out a loan application with a target loan amount. You'll also need to gather documentation such as W-2 forms and tax returns. After you finish the application, it will take one to two weeks for the lender to tell you the loan for which you are preapproved. This figure is accurate for only two to four months, however, so if you delay in purchasing a house, you may need to get re-preapproved.

Once you're preapproved, you're ready to start seriously looking at houses and bidding on your favorite properties. Even though you've been prequalified and/or preappoved, however, be a conservative bidder. Your lender can reduce the amount of money it lends you--not to mention that you don't have to spend the maximum amount of money you can. It's just more to pay back later.

Next Page: What is mortgage refinancing?

Related Mortgage Prequalification and Preapproval Articles