First Time HomeBuyer Series- Step 1 ...Get Preapproved

Step 1: Get Pre Approved for a Mortgage.

A lender will assess your credit-worthiness and eligibility for a home loan before you formally apply in a process called pre-approval. 

By evaluating your household income, your savings and your existing debt, a lender can tell you “how much house” you can afford. (For a quick, do-it-yourself estimate of your mortgage limit, use the Mortgage Payment Calculator)

During the preapproval process, you might want to also ask your lender to provide you with a list of potential closing costs. A lender is not required to provide you with a formal quote of these costs until you actually apply for a mortgage, but it may be prudent for you to have this information early so you can budget for the overall costs of the home purchase.

Though a preapproval is not a guarantee of obtaining a mortgage on the home you hope to buy, obtaining a preapproval before you make an offer on a home can strengthen your negotiating position. A seller who is confident in your ability to finance the purchase of a home is likely to seriously consider your offer.

Remember that you are under no obligation to obtain a loan from the lender that pre-qualifies you. However, the lender can answer questions and provide further details on the preliminary financial assessments and decisions you need to make as you prepare for homeownership.

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