To Pre-qualifying for a home loan costs you nothing.   Prequalifying does not mean you have been approved; it just means you appear to meet the income and credit guidelines based on the information provided.  Most realtors will request you prequalify, so they know they have a qualified potential buyer.  Most borrowers want the smallest down payment with the lowest interest rate fixed for 30 years.   The lender primarily analyzes the borrower and the property.

To qualify INCOME AND CREDITWISE:

  • Credit score - You must meet a minimum score for all LONGTERM mortgage loans.  Based on your score, the lender will advise what is the best loan for you.  If there are 2 borrowers, the lower of the 2 middle scores will be the credit score we use in qualifying.
  • Credit - In addition to your score, the lender will want explanations for derogatory credit.  If there are unpaid collections, you may be required to give us a written explanation and sometimes be required to pay the collections.  If there are any credit inquiries within the last 4 months, the lender will ask you to explain why credit was pulled and whether any loan resulted.
  • Income - If the person can qualify on his or her W2 wages, all we need are 2 years of W2s and the 2 most recent paystubs.  If self- employed, we'll need the last 2 years of federal tax returns (all pages), W2s, 1099w, and 2 most recent paystubs if applicable.  If business income is not on a personal return, we also need 2 years' federal income tax returns on the business and usually a recent Profit and Loss Statement.
  • Assets - Does the application show the borrower has money available for down payment and closing costs?  If not, from where will the borrower get their money?  Maybe you are getting a family gift?  Do you need down payment assistance?  Secondary Market Lenders have strict guidelines on the sources of down payment and closing costs funds; be sure to ask your lender what is acceptable.

To qualify PROPERTYWISE:

  • If acreage with the house, the acreage cannot exceed 1/3 of the total appraised value.
  • No mobile home loans (singlewide or doublewide) are eligible at this time.
  • Log cabins or metal homes are acceptable, as long as there are good appraisal comps.
  • Value of property - Properties must be in good and safe condition.  An appraisal will be ordered to determine the value of the property.  Ideally, the appraised value will be for at least the sales price.  If repairs are required by the appraiser, those repairs must be done before the home closes.  Many contracts state whether or not the seller agrees to pay for any repairs.

Your lender strongly encourages pre-qualifying.  Pre-qualifying gives you the confidence you are shopping in the right price range.

Take advantage of the advise your ANB lender has for you today.  Check out your options.