Before you start your new home search, it is important to get pre-qualified.  Mortgage lenders can pre-qualify prospective homebuyers prior to requesting a mortgage on a particular real estate. Lenders estimate a borrower’s monetary ability to commit to monthly payments; therefore, pre-qualifying assists lenders with making better loans and helps borrowers search for a home within their means. By being informed in advance, the sum of the loan one can qualify for is already known and takes the conjecture out of the real estate buying procedure and could increase the bargaining power of the buyer.


First, one must supply the lender with a basic financial summary that will consists of gross pay prior to deductions and taxes, savings and additional liquid-assets accessible for the down-payment and closing-costs, this is called the Loan Application. In addition, debt calculations, along with installment payments on any unresolved loans, credit-card debt, personal loans, school loans, and home loans are important as well. Credit-history and rating are also considered when deciding the largest amount that can be borrowed and what the interest rate will be.


During the pre-qualifying procedure, lenders take into account the interest-rate and length of the mortgage to establish the sum of the loan. Higher interest rates will result in higher monthly payments.


Prequalification results disclose the highest loan amount that one can be qualified for. The lender will advise the amount needed for a down-payment on the kind of loan the person is applying for, and calculate the closing-costs. Naturally, qualifying for a specific amount does not automatically indicate that one should pursue a mortgage for that amount. It may be smarter to aspire for a somewhat reduced sum to make it less stressful repaying the mortgage.


Prequalification reveals the monthly-payment of the interest and principal on the loan one may qualify for. In many instances, the lender can estimate the sum to be paid toward mortgage-insurance, hazard-insurance, and property-taxes, which in most instances, will be combined with the monthly mortgage-payment. Understanding these amounts in advance will give a borrower an exact approximation of the anticipated cost of home ownership.

Ready to get Pre-Qualified and save money?  We suggest you contact our Preferred Lender; Lee Aldrich - Stearns Lending.  Give him a call at 612-839-0217 or Apply Online 


Zachary Adams | Realtor | Wright Sherburne Realty | 612-845-7890