What Do I Need To Do To Get Pre-Qualified For A Mortgage?

Anna 'Banana' Kruchten is hosting an ActiveRain contest this month titled "FAQ Break Into Summer Organized Contest" in which she is challenging us to write 5 new posts with answering 5 consumer FAQ's.  This is an easy one for me, because there are at least twice that number of questions that I am asked on a regular bases by consumers.  So lets begin with the one I am asked most often.

What Do I Need To Do To Get Pre-Qualified For A Mortgage?

The majority of the loans I do are for First Time Homebuyers, so they do not have a clue as to what is involved in being Pre-Qualified for a mortgage.  The answer to this question is simple, and one I try to make as painless as possible.  At least 80% of the information I need to know to Pre-Qualify a Borrower, I can find out in about 10 minutes.

• First I need to pull their Credit Report, so I need:
• Their legal name
  
• Their Social Security Number
• Their home address
• Second I need to determine their Debt-To-Income Ratios, so I need to know how they are paid:
• If Salary, what is the yearly salary without bonuses
• If by the hour, what is the hourly rate and how many hours per week, without overtime
• If Self-Employed, what is the Net Gross Income on the schedule "C" on their tax returns the last two years.
• If Commission, have they been receiving it for at least two years, and if they take business deductions, what is the Net Gross Income on schedule "C" of their tax returns

There are other income questions, but these are the four most common.

With this initial information I can pull credit, determine the Debt-To-Income Ratios, and begin to establish what price house they could possibly qualify to purchase.  Also based on the initial above information, I will either go on to complete a full application, or stop right there until we correct anything that needs to be corrected, especially credit scores.  

But let's say everything is good, I then go on to collect the following information:

• Contact information
• Date of birth
  
• Where they have lived for the past two years
• Where they have worked for the past two years
• Additional income if any
  
• Bank information
• Series of "Yes" and "No" questions.

With this information, I can then run the file though Automated Underwriting (DU), and have very good idea if they qualify or not.  Of course at this point, I am basing my opinion on what they have told me, and still have to verify the information, by collecting:

• Paystubs
• Tax Returns (if needed)
• Bank Statements

For most Borrowers, the above is all I need, but there are times other information might be needed to determine what they can be Pre-Qualified for.

I can Pre-Qualify Borrowers on the phone or face-to-face.  Most Borrowers choose to be Pre-Qualified on the phone, and it normally takes about 30-40 minutes if I take a full application.

 

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com