Mortgages help soften the large initial expense of buying a home and allow you to pay for your new house over time. But qualifying and being approved for a mortgage is a complex process that requires careful thought and planning. Though qualifying for a mortgage may seem daunting at first, it’s worth planning out ahead of time — sometimes doing so can increase your chances of getting the house you want. As you search for mortgages, pre-approval and loans, make sure to schedule your applications so that even if your credit is run multiple times (which is likely if you’re applying to a variety of lenders) they will all occur in one month, which will help minimize any impact on your credit score.
Prepare to Qualify



Pre-Approval
You can potentially increase your financial security while showing the seller that you’re able to follow through with payments. To do that, you need to be pre-approved for a mortgage. Pre-approval is essentially proof that a lender is willing to loan you money. Being pre-approved for a mortgage gives both you and the seller confidence that you’ll be able to pay for the home, thereby increasing your purchasing power.
The first step is pre-qualifying for a mortgage. Before a financial institution will pre-qualify you, it will evaluate your finances, including your income, debt and assets to give you an idea of the mortgage amount you can expect to receive. Pre-qualification is easier than it may sound because it can be done over the phone or on the Internet, usually with no cost involved. Pre-qualifying for a mortgage is a way to initiate a discussion about your mortgage options and what you can afford.
When it comes time to bid on a property, a pre-approval letter from your lender can be shown to sellers to confirm that you already have financial backing and the ability to go through with the sale, which makes you a much more attractive buyer to sellers. However, be aware that pre-approval is not an absolute commitment from a bank to issue you a home loan.
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