I work with a lot of first-time home buyers, you may be one of them, and I'm asked all the time what is involved with getting pre-qualified for a home loan. To be honest I didn't have all the answers, so I interviewed the loan officer that I trust the most, Kurt Owen from BB&T's Covington, Georgia branch. Here's what he has to say on this topic:
1. What documents do people need to get pre-qualified? For a preq-ualification, it is helpful to have your most recent paystub, bank statements, W-2, and tax returns available. Though no documents are actually collected at this stage, it will help you be more accurate with the lender, which in turn will give them a better idea of what you can qualify for.
2. What are the basic requirements for obtaining a loan? I've always heard you must hold the same job for at least two years, is that true? Requirements vary from loan to loan, but 2 years in the same line of work is preferred. It is not a requirement, though, unless they are self employed, commission paid, or paid with a 1099.
3. What kind of questions do you ask people? Normally, to take a pre-qualification, I ask for: Names, birthdates, social security numbers, address history (2 years), contact numbers, work history (2 years) including addresses phone and pay, family information (married/single/divorced, kids, how many), Asset information (checking, savings, retirement, other), and what they are looking for as a payment. Then, based on the answers given, I may ask follow up questions that could range from child support to gift information for the down payment.
4. Once you're pre-qualified, how long are you approved for? It is important to know that a prequalification is not an approval or even a pre-approval. Pre-qualifications are based on verbal information only, do not set an interest rate, and are not underwritten. However, most major roadblocks can be identified through a prequalification, and they are normally accepted by most agents as an indication that the borrower they are dealing with is, barring an unexpected issue, probably able to obtain financing. For the most part, any lender can issue a prequalification without much of a problem, but it could have many "holes" in it. A true pre-approval means that documents are collected just like an application, and the loan is approved "subject to" an appraisal and identified property.
5. Is there anything else you would like to add to explain how this process works? Most prequalification's can be taken over the phone or in person in about 30 minutes, but leave more time available so that you can ask questions. You should have a response in 24-48 hours after applying for a prequalification, though you should ask the lender for a time estimate. Always tell the lender how much you are comfortable spending and have your prequalification based on that number.
Here's a little information about Kurt so you can get to know him better:
My name is Kurt Owen. I started in the mortgage industry in 2003, but have been with BB&T since 2006. I have lived in the area for 25+ years and have no plans of leaving. We have a wide range of products to service clients with varied needs including FHA, VA, USDA, Conventional, Construction/Permanent, and Non Conforming loans. I will work hard to make sure my clients are in a loan they are comfortable with, understand, and can afford. BB&T is safe and strong. Our mission is "Helping our clients achieve economic success and financial security."
Office: 770.385.2635 E-mail: kowen@BBandT.com
I hope this has increased your knowledge on the pre-qualification process, especially if you're a first-time home buyer in the beginning stages of looking for a home. It's best to get pre-qualified for a loan before you start looking at properties--this will ensure that you don't fall in love with a home that is out of your price point. Kurt would be happy to help you determine how much you can afford and be comfortable with.
If you don't currently have a Realtor and you want to purchase a home, please contact me at 404.357.2231. And if you're a first-time home buyer you still have a few months left to take advantage of the $8,000 federal tax credit and the $1,800 Georgia tax credit.
It's a great time to buy a home in Georgia, whether you're a first-time home buyer or not, and I would love to walk you through this process. If you are in the market to buy or sell your home in the Bethlehem or Dacula area, I would be happy to assist you! My passion is helping people find their dream home and stepping them through this exciting journey. I serve the Walton, Barrow and Gwinnett county areas. Call or text me today: 404.357.2231!