Tips For Getting Pre-Qualified For A Mortgage Loan

Most homeowners and sellers these days will not even show you their homes unless you have a pre-approval letter from a mortgage lender. Otherwise they face wasting hours of their time showing their properties to people who cannot even qualify for them. Getting a pre-approval for a mortgage is actually quite easy, and it is a good idea to pursue, as this will save you valuable time!

Normally you can get a pre-approval letter from a lender with a short phone call – you simply allow the lender to pull your credit, and based on your credit-worthiness, you’ll be pre-approved. However this is based only on what information you have told them verbally, so if you want to make sure that you are really qualified, it is better to provide as much information and documentation as possible form the start.

It’s a good idea before you start calling around to try and get a loan pre-approval to check your credit for yourself and see exactly what is showing up on it. There are a few sites that provide a true FICO score for a small fee, and others out there that some consider be a “FAKE-O” score, such as creditkarma.com. However, this is still a good resource – it will be accurate enough for you to do a self-assessment of your own credit-worthiness. If there are any negative items showing up on your credit that are incorrect then contact the credit bureaus and creditor reporting it and try to resolve it before applying for a loan. You can also improve your credit rating by paying off recent charge offs or collections and paying down the amount of debt you owe on revolving credit accounts like credit cards. However it is wise to speak with a professional before doing this to make sure you are paying down the items that will have the biggest effect on your score.

Lenders will also look at how much money you have in your bank account and your average balances over the last couple of months. So if you have any other side income that is not being deposited in your accounts now consider running as much of it through your bank as possible so that you look stronger on paper.

When beginning your search for mortgage lenders, you also want to ensure you avoid having your credit pulled multiple times as this will lower your credit score (although usually for only a short time). This is especially true when shopping for a home loan online. Many websites and squeeze pages that ask for your social security number may sell your information or shop it to many other lenders resulting in dozens of inquiries on your credit report. This can potentially destroy your score. Do not provide your social security number until you know who you are talking to and are comfortable with having your credit checked.