Get Pre-Qualified
The first step in buying a new home is establishing an approximate budget of how much the home buyer can afford to spend. Getting pre-qualified for a mortgage lets the buyer know approximately how much money the lender will be willing to loan, i.e. how much house he or she can afford. The lender will take into consideration the buyer’s income, assets, debts and the size of the down payment. It is wise to get pre-qualified before beginning a house search, in order to establish a home buying budget. Pre-qualification will also strengthen the buyer’s bargaining position with the seller, who will have confidence that the buyer can get a mortgage in the right amount.
Pre-qualification is easy and typically does not require any credit check. The buyer provides the lender with basic financial information, over the internet or sometimes over the telephone, and quickly receives an estimate of how much the lender will be willing to lend. This is a ballpark figure of the maximum that the lender will lend, and tells the home buyer the maximum he or she can spend on a house. There is no fee for this service and there is no commitment on either side.
