AffordableHousingOnline

First Steps to Homeownership

  1. Pre-Qualification
  2. Pre-Approval

You must first go through these steps before looking to purchase a home:

Part 1: Pre-Qualification

A buyer may get a pre-qualification completed by a bank or mortgage company before looking for a home to purchase. The pre-qualification will give you a good idea of how much house you can afford.

Part 2: Pre-Approval

A Pre-Approval is much better than just a Pre-Qualification because a Pre-Approval means the buyer has been approved for a potential mortgage by the bank. It is wise to already have a Pre- Approval letter from a bank or mortgage company before you start the search for a home to buy.

The pre-approval will speed up the process and you will know the amount of a mortgage that would be available. Make sure you don’t automatically start looking for a home at the top amount of the pre-approval. Make sure the mortgage monthly payment is something you know you can easily pay and the price of the home is reasonable.

For a pre-approval letter the buyer will need to submit proof of income, assets, employment, credit score and other documentation required by the bank or mortgage company.