Getting pre-qualified for a loan is a way of finding out how much you will be able to borrow, should you want to buy a home. You are able to get pre-approval over the phone without having to submit any proof simply be telling the lender about your income, any debts you may have, and how much of a down payment you can afford. This does not means that you must go through with obtaining a mortgage, but simply allows for you to begin researching potential homes while knowing roughly how much money you will be able to borrow. This is a valuable research tool because it allows you to filter out houses that are too expensive, as well as homes that may not be in a good neighborhood, but you thought would be all that you could afford.

From the lender's point of view, granting you a pre-approval is a commitment to lend you money because it causes them to begin to get your financial records together and beginning the actual approval process. It also shows lenders that you are interested, which will allow you to get your actual loan much quicker than if you were starting from scratch.

Find Out About Your Credit History

Before attempting to get a mortgage, it is important to find out about your own credit history. The three major companies in this field are Equifax, Experian, and Trans Union and they will allow you to see exactly what a lender would see. Pay very close attention to certain boxes on this report, since they tell the lender how much money you owe other lenders, how often you get behind on payments, and how consistent you are at making payments on time. Getting the actual report is quite easy, as you simply call one of the companies that was mentioned early or visit their websites and request a report. There is a fee for this service, but the insight that it will give you into your credit rating is definitely worth it because it will increase your chances of being approved for a mortgage. As long as you do not see any red flags on your report and a creditor will not like, you are free to begin the process of getting a loan to pay for your house.