Tag: Prequalified

Getting prequalified is a part of the first steps of the home buying process. This comes before getting pre-approved and is a general estimate on how much you can afford. The estimate will be based on the information you provide about your finances, along with a credit check. This period is a good time to work with your lender to discover which mortgage is best for you. If you’re comfortable with your finances after getting prequalified, you might as well get pre-approved instead.

To calculate how much mortgage you can get, your credit profile and annual income will be considered. The expected loan term, interest rate, and monthly debt payments will also be included. Keep in mind the lender is only telling you how much you might be able to borrow. After all, the lender isn’t going to look at your finances as closely as they will during the pre-approval process. Therefore, the amount you were told at first is subject to go down or up.

If you’re still confused about how much you can prequalify, try using a prequalification calculator instead. It’s not always wise to borrow 100 percent of what the lender offers. The number they give you is simply the maximum amount the lender is willing to give you. That doesn’t mean your budget will allow for it.