As exciting as it is to be buying a new home, it can also be a stressful time. With rising interest rates and a competitive housing market, you want to be as prepared as you can be to show sellers how serious you are about buying. Taking this easy pre-qualification step with a trusted West Banker will allow you to better understand the process and your options while house hunting.
What is a pre-qualification? Pre-qualification is a term that means a bank has taken the initial step to look at your stated finances to help you determine how much you can afford when buying a home. This estimate is not what you are actually approved for, but a rough calculation to give you and your realtor a ballpark idea of what you may qualify for. You are not actually approved for that amount until the bank verifies documentation relating to your income, debt, assets, and credit.
What information is a banker typically looking at with pre-qualification? There are three major factors taken into consideration when considering a pre-qualification letter. These are DTI or debt-to-income ratio, your credit score, and loan-to-value/source of down payment.
After a West Banker has reviewed with you, they may be able to complete a pre-qualification letter stating you have undergone a preliminary evaluation with the bank. Now you can show realtors and sellers that you are serious about finding your dream home and have already taken initial steps with your banker.