UNDERSTANDmortgage
How To Qualify For A Mortgage Loan
When looking into how much mortgage you can afford or the qualifying requirements its important to stay focused on what you are comfortably affordable with verses the maximum amount you may qualify.  Lenders will often tell you how much you are qualified to borrow – that is, how much they are willing to loan you. 

In order to qualify lenders will compare your income and debts and come up with an amount based on the various lending programs available to you. As mentioned above, how much you could borrow is sometimes very different from how much you can afford to repay without stretching your budget for other important items. Lenders do not take into account all your family and financial circumstances. so you will need to keep that in mind as you consider your budget.  

In addition to the items listed below, a lender will want to review your credit to determine how you currently pay your bills as it is a likely indication of how you will pay them.  When you speak with a mortgage loan originator, they will pull a credit report to help provide you with a pre-qualified  amount to use as reference before you start shopping for a home.  If you are unsure if you have credit challenges you can actually get a free copy of your credit report from all three of the credit reporting agencies once per year at: https://www.annualcreditreport.com  Its a good idea to check for errors or debts you don't recognize.
Below are a few items you will need to have available when you speak with a mortgage loan originator.

INCOME DOCUMENTS

In order to determine how much income can be used for qualifying purposes a lender will need to make copies of the following items:

Last 2 Years Tax Returns
Last 30 days of Pay stubs 
Last 3 months bank statements
Proof of any other income received

INSURANCE

Although not required at the initial stage of qualifying for a mortgage loan, you should know that Homeowners Insurance and possibly Mortgage Insurance will be a necessary requirement to obtain a mortgage loan.  These items are discussed in more detail in the Tips section on our homepage.  These tips are provided by VERIFIEDmlo's.  These professionals adhere to the highest code of ethics and have been properly vetted by past clients and industry professionals. 

PREAPPROVAL

Your Lender will provide you with a Pre-Approval letter once they have reviewed all of the required documentation.  This letter serves as notification to anyone involved with selling a home such as a Real Estate Agent or Current Homeowner that you mean business and are prepared to buy a home.
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