I'm looking to buy a home. Do I need to get a credit check first, or can I just prequalify for a mortgage?

Answer 1

You should get pre-approved first before you go house hunting.

You have to know what you are qualified to purchase even if you have bad credit.

So the first thing you should do is contact a mortgage broker so you can complete a loan application, after which he will run your credit report.

This credit report will give him your credit score. Get a cup of coffee or your favorite beverage when filling out the loan application this is not a 15 minute chore.
Your credit score will tell him what loan programs you are qualified for as well as the interest rate you can expect. This credit score will tell if you are able to get a 100% loan and if not how much cash you have to bring to the table as your down payment.

There are lots of documents and information the mortgage broker will need. I will give you a few to get you started.

#1 Six months of all bank statements you use currently, as well as any statements from your 401k at your place of employment

#2 One months of pay stubs from all that are going on the mortgage.

#3 Two years of federal income taxes and W-2s

After discussing the best loan program for you and agreeing on the program you want, the mortgage broker will issue you a pre-approval letter.

Now once this has been established you should connect up with a real estate agent to find you a home. Upon finding a home you like the real estate agent will then prepare a sales contract for you and the seller to sign.

The mortgage broker will order an appraisal of the house to prove the value.

Once all the documents necessary has been collected the mortgage broker will order loan docs for the program that you agreed to earlier. Again don't plan on spending a lunch hour there to sign loan docs this is a process so be prepared to be there for awhile.

Don't sign the loan docs if anything change from what the mortgage broker explained to you. Call and get an explanation.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

No institution would pre-qualify you without doing a credit check first.

You'd be wise to check your credit reports yourself before you "invite" others to do so. Do a web search on "annual credit report" and you'll find a site that will tell you how to do this for free (once a year).

Some folks recently have really been screwed by lending institutions. Since you're probably a new buyer, I'd suggest you consult a "maven" - someone who really knows how home loans work, and who has NO vested interest in your loan. Watch out for loans that change rate or have pre-payment penalties - and don't get one. Remember the realtor works for the seller, not for the buyer.

Answer 3

Yes, the lending groups will check your credit and find your credit score first and ask about gross income, any debts (loans, car payments, credit card bills). Based upon this information, they will decide number of points (cost you have to pay for the loan for particular interest rate) and the amount needed down payment. Usually, you can do prequalify over the phone or on line. For more information, including how much down payment to put down, go to cnn.com, then click on business, then real estate. They have great calculators, such as how much is safe to borrow for your home, how to save for down payment, etc?

Answer 4

There is a difference between pre-qualified and pre-approved. With pre-qualifying, it's not necessary to give your social security to anyone to get a credit check until you are ready to get pre-approved. If you don't know your credit score, get it yourself first. As you are interviewing lenders, you don't want each one accessing your credit information because that will reduce it. You can go online and get your score for around $10. Just tell the lenders what your score is and what credit agency it came from. They can ask you questions about it. Have it in front of you when speaking to them. They will ask you what your income and debts are. But ask them also for a "good faith estimate too" to verify their costs. Shop around for lenders. Once you decide which lender to go to, then give that lender your social security info and get a pre-approval letter from them. That's the beginning stages of an application. Sellers prefer Pre approval letters from lenders not prequalifying by a Realtor.

Answer 5

All you do is contact whoever you'll get the mortgage through and they will do the credit check on you. I would do research on-line before picking a mortgage company though.(Some have better rates .) Also, go through bigger companies cause smaller or middle-man co's will just charge you more $$ for their services cause they still have to go through the same bigger companies that you could have done yourself in the beginning! Hope this helps!

Answer 6

As a part of the pre-approval process your loan officer will get a current credit report.

Choose your loan officer carefully. Remember that interest rate is only one component of the right loan for your personal needs and goals. This is your loan, a huge commitment, be pro-active in theprocess. Choose a loan officer who is more intererested in what is right for you than how much they are going to make on you.

I'd be happy to email you some information that will help you begin educating yourself on the process so that you may make informed choices.