Getting pre-qualified for a mortgage involves an assessment of your current financial status to determine how much you can afford to borrow for a home, which is a crucial factor when it comes to repayment. While it is less in-depth than a pre-approval, it can provide a good estimate on how much money you’ll have to work with when shopping for a home. First State Bank of Russellville, AR, can help home buyers secure the right mortgage, which allows them to buy the home they want without incurring large expense in the process.
What Do I Need to Know About Pre-Qualifying for a Mortgage?
You’ll Need Proof of Income/Assets
You will need to establish proof of your income and assets for pre-qualification. This entails providing documentation, including pay stubs showing both recent and yearly income, recent tax returns, W2s, bank and retirement account statements, and any other pertinent documentation regarding income and assets.
Employment Verification Is Often Necessary
Along with proof of income, you’ll also need to verify that you work for a specific employer. Steady employment is important when seeking pre-qualification on a mortgage, and banks will often call your place of work to verify how long you’ve been there. They might also ask to speak with a previous employer if you’re recently hired. For those who are self-employed, banks often require the two years’ tax returns as proof of income.
Good Credit Can Help
While you can still secure pre-qualification with a less-than-favorable credit score, your interest rates are likely to improve along with your rating. Those with 740 or higher will receive the best rates, while those closer to 620 (which is the minimum for Federal Housing Administration loans) will be required to pay greater interest. Lenders are often willing to help borrowers improve their scores, which will result in a better chance of being approved.
First State Bank provides clients a wide range of financial services, from personal banking to assistance with business finances. Call (479) 498-2400 to speak with a representative in the River Valley about your needs. You can also get to work on getting pre-qualified for a mortgage by visiting the website today.