Pre-qualification starts the mortgage process. A Loan Officer or Loan Consultant will conduct a short “interview” with potential borrowers to gather information necessary to see how much you can afford on a monthly basis.  Once a loan consultant has gathered this information, ie the borrower’s income and debts, a determination can be made as to how much the borrower can afford to pay for a house. Since different loan programs can cause different valuations a borrower should get pre-qualified for each loan type they are interested in.

Two Main Factors

In attempting to approve homebuyers for a particular type of mortgage and a certain loan amount they desire, mortgage companies and lenders all look at two MAIN factors. ONE:  the borrower’s ability to repay the loan and, TWO:  the borrower’s willingness to repay the loan. Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, mortgage companies prefer for you to have been employed at the same place for at least two years, or at least be in the same line of work for the past two years.

The borrower’s willingness to repay is determined by examining how the property will be used. For instance, will you be living there or is it an investment property you will be renting out? Willingness is also closely related to how you have fulfilled previous financial commitments, thus the emphasis on the credit report and/or your current rental or mortgage payment history.


It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, your stronger point could make up for the weak one. Mortgage companies couldn’t stay in business if they didn’t generate loan business, so it’s in everyone’s best interest to see that you qualify.

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