Pre-Qualify

Generally, the first step to getting a mortgage pre-qualification is to contact a lender. However, we highly recommend contacting a mortgage broker because they will have access to a multitude of lenders. Rather than working with one lender, you can access a wider market and benefit from better terms and rates. 

If you’re working with a broker, they will ask for all the pertinent information to get you through the initial pre-qualification process. For example, this is likely to include some questions about your assets, income, and debts. To provide a pre-qualification, lenders need to know about your financial history and your reliability as a borrower. Since the financial information is self-reported, the lenders won’t need to do much in terms of verification. 

During this process, lenders should discuss your intentions for the property and run a credit check. Also, they will collect income, asset, and debt information to calculate both debt-to-income (DTI) and loan-to-value (LTV) ratios. By analyzing all this information, they can ascertain your creditworthiness. 

Pro Tip – If you want the home-buying process to go smoothly, it’s always best to be honest and forthcoming from the beginning. The more honest you are when providing information, the less likely you are to experience problems later in the process. If you were to provide false information during the initial application or misrepresent numbers, this will be discovered when the lender is verifying your application in underwriting, and it could be the difference between getting the property of your dreams and missing out on a mortgage. Ultimately, all lenders are different. With accurate information, the broker will ensure that all mortgage programs offered are suited to your specific situation. 

After the broker has received all the information they need, they will calculate what you’re likely to afford. With advanced knowledge of the market (we recommend working with an experienced real estate agent), you can pre-qualify for a mortgage and know what you can afford in terms of house prices. 

Once you have been successfully pre-qualified, your LO will then provide a maximum purchase price. What’s more, they should also be able to provide your credit score, that day’s interest rate(s), the estimated monthly payment, and estimated amount needed to close. 

When you go through the purchasing process, the broker will work with the lender you select through the application, underwriting, and closing stages while doing everything possible to ensure you close on time with the expected interest rate and costs. During the underwriting process, you will need to provide documentation to verify the information stated during the application phase. For example, this could be bank statements to verify stated assets or pay stubs to verify stated income. The lender’s underwriters must verify that you qualify for the mortgage for which you’ve applied in terms of both income and credit.