The mortgage prequalification process requires several key documents in order to be completed.  First, every applicant needs to present the previous two years W-2 forms.  Additionally, every applicant must also present the last months worth of paystubs.  Additionally, every mortgage prequalification applicant must provide a phone number to the human resources department at their primary source of employment.  Many lenders will also require applicants to present a list of retirement assets in addition to the previously mentioned documents.

Mortgage Prequalification- The Process.

In the past, this portion of the process would require that the individual applying present themselves to the processor and sign paperwork and present documentation in person.  Luckily, mortgage prequalification has progresses to the point that applicants can now simply send documentation in via certified email or fax.  Also, documents may also be signed at the applicant’s convenience.

Mortgage Prequalification- Document Processing.

At this stage of the mortgage prequalification process reviewers cover all aspects of the applicant’s paperwork and financial status.  The lender will decide how much of a loan, and at what terms, makes the most sense for the applicant on an individual basis.  Though the terms may not be what the applicant was expecting, or what they believe they are qualified to receive, but it is what the lending institution has decided is best.

This stage of the process can take up to several days.  Documentation is being requested from variety of sources, and often times, the controlling institutions may require several days in order to process the requests and obtain the requested documentation.  Often times employment must be verified and banking institutions must be contacted in order to verify the amount of funds currently in operation, as well as the source of the funds.

Mortgage Prequalification-Patience.

Regardless of the outcome, mortgage prequalification is an often taxing and stressful situation.  Applicants are cautioned against becoming overly stressed and worked up during the course of events.

Buying a home is a scary proposition, though the mortgage prequalification process is relatively easy.  However, by following the correct steps, potential homeowners can not only more easily manage their personal stress, but they can also expidite the process.  Additionally, it offers them a serious advantage over their competition in the home buying market.

Mortgage Prequalification: How it Related to the Home Buyer.

Mortgage prequalification allows potential homeowners to understand from day one just how much they can afford when it comes to buying a home.  While mortgage calculators are usefull tools, they do not take into account the full gamut of factors when making an evaluation, including credit history, market trends, and existing debt levels.  Mortgage prequalification is the only clear way in which perspective buyers can get a legitimate idea about how much they can afford, and what banks are willing to offer them.

Mortgage Prequalification: How It Impacts Your Agent.

Window shopping for a home is one of the most enjoyable for things for many people to do.  However, no matter how many details you give your agent about your personal prefernces, without a firm idea about your price range, ultimately, the whole process is stuck in window shopping mode.  A clear understanding of your personal financial level will allow your agent to eliminate homes outside of your range, simplifying the process.

Mortgage Prequalification: How it Impacts the Seller.

Sellers are often stuck in a position where they are attempting to sell their house as fast as possible while maximizing total selling price.  While a higher overall dollar figure would be wonderful, having to wait several months for the necessary paperwork to be processed can end up costing them more money in the long run.  Potential buyers who have already completed a portion of the processing work are much more attractive than those that have not been prequalified for a loan.  Additionally, this makes you the more attractive offer if you submit a similar offer compared to potential buyers who still have 2 months work of paperwork to file.

Mortgage Prequalification

Beginning the mortgage prequalification process is the first step that every potential home buyer should take. By starting the process as soon as you decide that you are going to begin actively looking for a home you not only simplify the process for yourself, but you gain a competitive edge over other potential homeowners who are not prequalified.

How it Relates to You.

The primary way that mortgage prequalification helps you, the home buyer, is that it answers the question “how much house can I afford?” There are just to many factors involved in the answer to this question (credit history, employment history, debt, mortgage programs) that a short or easy answer is impossible. The only way you are going to get a clear answer is through prequalification. Their is no worse feeling in the world than finding your dream home and then finding out that it is out of your price range, or that you might not qualify for a mortgage at all.

How it Relates to your Real Estate Agent

Potential home buyers provide their real estate agent with dozens of specific details about the type of home that they want, while often overlooking the most crucial detail: what they can afford. Window shopping for a home is fun at first, but after a while you and your agent are going to want to narrow your search parameters down to houses you can not only see yourself living in, but that you can make a legitimate offer on.

How it Relates to the seller.

Home sellers are looking to sell their home for as close to their asking price as they, as quickly as they can. When you make an offer on a house, the seller is going to consider both the offer price, and the speed that they think they can close. If you still need to go through the entire mortgage prequalification process not only does that increase the time that it will take for you to close, but you suddenly become a liability. If they accept your offer and you do not qualify for the agreed upon amount then they have effectively lose out on any potential offers they would have received while they waited for you. Basically, very few sellers will be willing to take a chance on a buyer who is not gone through the mortgage prequalification process.

In closing.

Hopefully the previously listed information will help you on your journey to home ownership. Much like life in general, buying a home is all about information and timing. By starting the mortgage prequalification process as soon as you start looking for a house, you provide yourself with free, vital information, and position yourself to act with speed and certainty if your ideal home becomes available.