Loan Prequalification Calculator
How do I pre-qualify for my Home loan?
Our loan prequalification calculator is an unofficial evaluation of your ability to afford a Home. The calculations will show you the minimum requirements it takes to own a Home loan.
Pre-qualification is a necessary step before pre-approving. When going over how you can pre approve, a lender will want to see physical evidence of your financial capabilities before taking on your application. This requires a background check of your debts, assets, income, credit score, credit history, etc.
Once a lender verifies your information (pay statements, tax returns, proof of assets, etc.) they should provide a pre approval letter you can give to a real estate agent or seller stating that you’re prepared and financially capable of purchasing a Home.
However, prequalification doesn’t always guarantee preapproval. You can get rejected if your finances do not match the information you put on your report.
Loan Prequalification Calculator Elements
To further help you figure out how to qualify for a Home loan, we have broke down the terms and sections from our loan prequalification calculator. This breakdown includes the following:
- Loan Amount: The original amount agreed upon by the lender to the borrower.
- Interest Rate: The mortgage rate that is attached to your current loan.
- Loan Term (Years): The amount of time your mortgage will take effect with a lender, interest rate and other legal conditions. As the term ends, the remaining balance of the loan will need to be renewed, refinanced or paid in full.
- Annual Net Income: The amount of money you make before any tax/benefit deductions. This is a necessary piece of information for lenders to know if you are within the boundaries of making monthly loan payments.
- Income Sources: The different ways you are getting money in your pocket — legally. You may be working a full-time job but also do paid part-time work on the weekends. Every source needs to be reported.
- Payments for Existing Debt: The payment records that will show how you are combating current debts. Each transaction whether approved or not will have to be put on the record to show your credibility to make payments.
- Credit Card Limit: The maximum amount of money that is currently linked to one or more of your credit cards.
- Number of Dependents: The number of people who "depend" upon you and your earnings for their own survival. In most cases, children under 18 years would be deemed as your dependents.
How long do I have to wait to get my prequalification approved?
Since this process is considered a nonbinding evaluation that has no regulations or conditions attached, you will be pre-qualified quickly depending on your lender.
Sometimes the answer may come to you through a phone call, in-person or automatically online.