The obvious reason to get pre-qualified for a home loan is so that you know how much home you can afford. The purpose of the pre-qualification process is much broader, though, than simply crunching income vs. expenses numbers to see what mortgage payment you can afford!

As mortgage professionals we use your income vs. expense ratio as a starting point in determining the “big picture” of your home purchasing process. We will run a credit report to determine your credit card and loan balances. Also, the credit report will show whether or not you are current on all your debt payments.

After all this information is compiled, you will have a good idea as to your creditworthiness, the mortgage amount you can comfortably afford and what, if anything, you need to do to improve your credit rating.

Your Averbach consultant may suggest you pay off credit cards and will certainly advise you to clear up any problems or incorrect information in your credit report. It’s a good idea to begin the pre-qualifying process several months before you actually plan to begin shopping for a home. That way you’ll have time to clear up any credit report issues. About 90-120 days before you close on your home, you can lock in a favorable interest rate as a hedge against rising rates in the future.

A not-so obvious reason you may want to visit a mortgage broker before you begin house-hunting is so that the seller knows you are able to acquire a mortgage without any surprises. Your offer to the seller is much stronger when you don’t have to put “qualifying for a mortgage,” as a subject-to clause!

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Mike (604-710-2550) or Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.

This entry was posted on Tuesday, June 10th, 2008 at 1:09 am and is filed under Mortgage Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.