About Prequalifying Mortgage Loan
When you are pre-qualified for a mortgage loan, the lender (banks or financial services) will examine your income to provide you with a general estimate on how much you can borrow. Keep in mind that the term “General” means that this process isn’t a commitment to lending nor a guarantee that you would get that amount from a lender. In fact, it is just a common way to open up the talk between the mortgage lender and possible clients. Prequalification often leads to the next step in your lending process: pre-approval.
Prequalifying Versus Preapproved Mortgage Loan
A prequalifying mortgage loan differs from a pre-approved one in that it assesses whether the debt-to-income ratio would fit the program guidelines of an American bank for the mortgage. Also, it will provide an estimate of how much you can borrow, which can be a helpful step in your house search.
On the other hand, a preapproved mortgage includes the same steps as other mortgage applications. You will provide your personal and financial information, which will be reviewed by the underwriters of the lender later. If you get pre-approved, it means you will have a conditional commitment by your lender for a loan amount.
Where to Get Started
You can get pre-qualified for a mortgage through many big lenders in the US. For example, Bank of America requires a few basic information such as name, phone, number, and your ZIP code during their application. Unlike other institutions, a specialist will contact you later to provide a consultation with an estimate and available option. Also, he will ask you for several additional documents like tax records, bank statements, and pay stubs. Other banks also have a similar process for the prequalifying mortgage. In most cases, it is a standard across the board.
How to Get A Prequalifying Mortgage Loan from Bank of America
Step 1: Visit the official site of Bank of America for the mortgage at www.bankofamerica.com/mortgage.
Step 2: If you don’t know which option is the best for you, just scroll down the “I Want to” and choose your option.
Step 3: Fill out your contact information in the next section, including name, phone number, and ZIP code.
Step 4: A lending specialist at Bank of America will call and advise you on the available option at the bank.
Step 5: Choose an option that meets your needs and proceeds to be prequalified for the mortgage.
Benefits of Using A Prequalifying Mortgage Loan
- It gives you an estimate on your borrowing power.
- It can be done easily and quickly online.
- It is offered without any cost.
Notice for Users
Regardless of your prequalified loan amount, it is advisable to stick to the planned budget that you can afford comfortably. A lender might prequalify you for a larger amount. In these cases, you can still scale back to the lower mortgage amount. Also, you are not obligated to share a prequalifying loan with your real estate agent, so just ask them to show your house in the price range which might fit your financial comfort zone.
Other Necessary Information You Need to Know
- Keep in mind that there is no warranty that you will be qualified for a loan. A pre-qualification and an approval are often miles apart when it comes to scrutiny and documentation. Before you are qualified, an underwriter might put all of the financial documents in check. He will be a financial detective that inspects your application to ensure it can meet the guidelines of the lender.
- The amount of prequalified mortgage will be based on your information about your credit check, assets, and income.