How to pre-qualify yourself to buy a house
Welcome to our pre-qualify series! We are Top Level Home loans and our whole purpose is to be able to give you tips and strategies on how you can obtain your home mortgage.
Sincerely, I had to look for information when I first bought my home, and I would have appreciated if there had been a series like this on how to pre-qualify yourself.
The first actions you have to take and perhaps even getting rejected for the first time are sometimes the most difficult parts of starting this path and being a homeowner, in my opinion.
The goal of this series is to enable you to examine your own finances from the comfort of your own home, so that you can truly pre-qualify yourself and understand precisely where you are based on all the advice we are about to provide you.
We'll look at a wide range of topics, from the fundamentals to how to calculate your income, debt-to-income ratios, and mortgage payments, because all of these factors will be taken into account during pre-qualification and are essentially what the lender is looking for when he says, "Hey, you're ready to go and buy that home."
However, I want to take this opportunity to clarify that you should still speak with a professional, who can assess your unique circumstances and advise you on what you actually need. Nevertheless, this will give you a rough picture of where you are and what you need to do to go where you want to go.
1. The Basic questions you need to ask yourself:
We are going to get into the basics. The first part of pre-qualify yourself is the same question that I ask to anybody that says hey I am ready to jump into this journey:
Where do you work?
Now, the first reason I'm asking is that most lenders will want to see that you have at least a two-year job history. It does not imply that you must perform the same job for two years, but rather that you must be able to demonstrate your employment history over the course of a timeline. Typically, I follow up with, how long have you been there?
If that amount falls short of the two years we require, we go back and inquire where you worked prior to that. However, if there are gaps, keep going back until you can reach that two year history. This does not imply that if you have a gap, you cannot qualify.
2. Taxes.
The second basic thing we need to look at are: your last two years' taxes.
Your two years' worth of taxes is the second fundamental item that we need to examine. This implies that you must file taxes for the previous two years. The bank will want to confirm that the income you are presenting to us matches the income you are presenting to the IRS.
So, filing taxes for the past two years seems to be rather simple. You must file your taxes for the following year even if you just have one year's worth. There are exceptions, which is why it is crucial for you to always at least speak with someone, but at least with this series, you will be aware of what they are seeking.
3. Build your credit.
The next item on the list is that a credit check is very necessary. We need you to start with that right away if you enroll without ever having incurred any debt or used any credit.
Because credit is a tool used to be able to tell us (as the bank or lender) how you handle your money, we need you to build some credit. So, it is crucial.
If you have never started with credit, we need to get started.
If you already have credit, great!
If you have a bad credit, okay, we can fix that as well.
Therefore, these are the three important points you need to begin your pre-qualification procedure independently. If you enjoyed what you read here, watched one of our videos, or followed us on social media, we would appreciate it. v
Our main goal is to be able to assist you guys in beginning this adventure or in finding a new home. Owning a home has personally been such a fantastic experience in my life that I hope each of you can do the same someday and be able to build some wealth.
Don't miss our pre-qualify yourself series vvv and keep learning with TL.
See you in the next lesson on determining your income!v
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Miguel
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