Prequalify for a mortgage loan through a real estate agent or the Internet

What does it mean to prequalify for a loan?

Before you start looking at homes, you should know how much you can borrow. There are several ways to determine this amount. In order to prequalify for a mortgage, you need to gather some information - including your credit report, your income-to-debt ratios, and the amount of your down payment. You should also have some cash available for points and fees.

Can a real estate agent prequalify me for a loan?

A good real estate agent will ask you to fill out a simple form to determine your debt ratios and get your credit score (if you do not already have it). This is simply good business practice for real estate agents, since no agent wants to waste time showing you homes that you will not be able to afford to buy.

However, the agent will most likely show you the highest-priced homes for which you can qualify. This is also good business, since you are more likely to fall in love with a higher-priced home than a less expensive one. Once you fall in love, it is an easy sale. Remember, once you look at the most you can possibly afford, less expensive homes will be disappointing. Always try to look at the least expensive homes first and work your way up until you find one that satisfies both your needs and desires.

Can I prequalify myself for a loan using the Internet?

If you want to avoid seeing the most expensive homes first or you want to check out homes for sale by the owner with no agent, prequalify yourself for a mortgage. To do this, type “mortgage calculators” into any search engine. Look at several to get an idea of how they work. You want to find one that allows you to figure out how much you can borrow without someone calling to sell you a loan. If you are asked to give personal information, go to another website.

One website that has good information without requiring any identifying information from you is www.mortgage-calc.com. This site is also helpful in finding local rates. Click on your local area (state and city) and you will get a list of lenders and their current rates. When you find one you like, type in several interest rates to see the payment differences. Since you do not know yet exactly what your rate will be, this will help you come up with a range of affordable prices. Also, see if you can possibly afford a less than thirty-year loan.

This calculator even compares the costs of buying and renting. If you have never owned a home, this could be helpful. Many people simply compare the mortgage payment with their rent. There are many other expenses to home ownership, such as taxes, insurance, and maintenance.

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