FDIC-Insured – Backed by the full faith and credit of the U.S. GovernmentPre-qualification Checklist for First Time Home Buyers
Credit Score
Ensure that you are aware of your credit score and that your credit report does not contain any errors. Regularly monitoring your credit can help you detect fraudulent charges and discrepancies, hence securing your score before applying. Keep in mind that a higher credit score can lead to better interest rates and loan terms.
• Know your score.
• Ensure no errors on the credit report.
• Monitor credit regularly to detect discrepancies
Income Verification
Have your income verification documents such as recent pay stubs, tax returns, and W-2 forms for the last two years. These documents verify your income, so ensure they are accurate to avoid misrepresentation.
• Gather recent pay stubs, tax returns, and W-2 forms from the last two years.
• Confirm the accuracy of these documents
Employment Verification
Keep the contact information for your employer handy. Lenders often need this to verify employment. Be honest and avoid job hopping prior to the pre-qualification process as it could raise red flags for lenders.
• Keep employer contact information ready.
• Avoid job hopping before pre-qualification.
List of Assets
Include anything of value like bank statements, real estate, investments, and vehicles. It's crucial to overestimate rather than underestimate, but always remain truthful. Maintain a list of all assets like bank statements, real estate, investments, and vehicles.
• It's better to overestimate than underestimate while being truthful.
List of Liabilities
Accurate information about your current debts, such as car loans, student loans, and credit card debt, is essential. Be sure not to take up any new debts before the home-buying process as this could affect your pre-qualification.
• Provide accurate information about current debts such as car loans, student loans, and credit card debt.
• Avoid taking up new debts before home buying.
Budget
Have a clear understanding of your current budget, which involves monthly expenditures. This helps in determining the kind of mortgage payment you can afford.
• Plan for potential increases in expenses like utilities or property taxes.
• Understand your current budget and monthly expenses.
Pre-approval Letter
Request a pre-approval letter after pre-qualification. This can give you a competitive edge when house hunting. But remember, being pre-approved doesn't mean you must take a loan from that lender, feel free to shop around.
• Request a pre-approval letter after pre-qualification.
• Pre-approval doesn’t mean you must take a loan from that lender; shop around for the best options.
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