Prequalifying for a Mortgage is a Good Idea
When you are in the market to buy a home, there are many things that you need to know and consider. A great place to start is to get prequalified for a mortgage loan.
If you haven’t been through the mortgage process, getting prequalified can provide you with valuable information that can make your home search easier. Prequalifying is a quick and simple process that helps to narrow down your options and ensure that the properties you choose to look at are within your price range. Additionally, a lender can provide you with an idea of how much you can afford to pay with a mortgage. Perhaps best of all, this process is free!
Prequalification vs. Preapproval
It is important to know that there is a difference between getting prequalified and being preapproved for a mortgage. Prequalification gives you a general perspective on what your budget can be in the local market and can benefit you during the home buying process. In a highly competitive housing market, being prequalified can signal to the seller that you have serious intentions to purchase the property, which could be an advantage if multiple offers are being made.
On the other hand, preapproval involves a more in-depth look at your financial situation and ability to buy a house by pulling your credit report and credit history for review. Before pursuing preapproval, you will want to be confident in your intent to buy a home as having your credit pulled repeatedly can cause damage to your credit score.
How to Prequalify
Prequalification is commonly completed in a single meeting with a lender, where you discuss your intent of buying a home. The lender will ask several basic financial questions that will help determine the type of loans you might be eligible for as well as a suggested loan amount. Questions you can expect involve:
- Your total monthly income before taxes.
- Other income sources, like investment income.
- Any monthly debt payments.
- Other financial information.
Most lenders offer an online application service where you can complete forms to obtain a prequalification status. Financial calculators, like Trustmark’s How Much Can I Borrow calculator, can also give you an idea of how much money you could potentially borrow.
Seek Professional Advice
The entire process of home buying can be complicated, but you don’t have to tackle it on your own. Beyond prequalification, there are professionals you can turn to for answers throughout the mortgage process:
- A loan officer or lender is a representative of a financial institution who will guide you through the entire loan process.
- Sometimes, a mortgage broker will lead the process instead of a loan officer. A broker isn’t tied to one financial institution and can offer you options from different companies.
- A financial advisor can help you make monetary decisions, give advice or answer questions.
- A real estate agent can provide insight into the housing market and help you find suitable properties within your prequalified loan amount.
- For large real estate purchases or complex loans, it could be helpful to have a legal representative who can offer guidance on contracts and other legal matters.
Prequalifying with Trustmark
Trustmark offers a wide variety of mortgage loans that fit different budgets and lifestyles. When you are ready to begin your home buying journey, our mortgage lending experts are here to support you and help you find the perfect mortgage for your needs. Connect with a Trustmark Mortgage Lender in your area to get prequalified today!