Home Buying 101: Getting Pre-Qualified and Pre-Approved for a Mortgage

Posted: February 14, 2018 | Categories: Home Buying 101
By Highland Homes

Updated August 24, 2022

Serendipity by Highland HomesLet’s assume you’re on the house hunt. Maybe you already have a real estate agent on your side, and perhaps you even know which part of town you want to live in. Likely, you have a budget in mind. But how do you know what you can really afford and get approved to purchase?

There’s no wrong way to take on the early stages of the homebuying process. For many, the process starts with a thought and idea, followed by casually looking at real estate listings online. But before finding your new home, it's important to at least get a loan pre-qualification so you have a full understanding of the costs of homeownership and what you can afford. And, if you want to operate under realistic expectations throughout your homebuying journey as well as show home sellers that you are a serious buyer, take the further step of getting fully pre-approved.

I'm sure you are wondering...

What is a Mortage Pre-Qualification?

A mortgage pre-qualification is usually a simple online form, though can also be completed over the phone or in person, where you will provide information about your finances, and the lender will provide you with an estimate of what you might be able to borrow based on the information you have provided.

Getting pre-qualified helps you to better understand how much of a home you can afford by providing estimated monthly payments and helps you compare mortgage options in a safe, non-binding way. In addition, pre-qualification helps your lender learn more about your homebuying goals, employment, and financial status, so they can help identify the best mortgage loan options for your needs.

Pre-qualification includes running a credit check, as there are credit score requirements to get a mortgage and your score can affect the mortgage terms such as the interest rate offered. It's good to have a higher credit score in order to get the best mortgage terms, but you do not have to know your credit score to get pre-qualified and in fact, doing so is a great first step to understanding how your credit correlates to what you can afford, as well as for your lender to present options and find the best mortgage loan for your unique needs and financial situation.

So, how do you get pre-qualified? With our Lender Partners, it's as simple as an easy online application!

What is a Mortgage Pre-Approval?

mortgage approved

For a mortgage pre-approval, also referred to as a loan application, you will provide documentation supporting your income, assets, and other financial information given at pre-qualification. A pre-approval is the next step in the mortgage process to secure financing for your new home in Florida. Getting pre-approved helps cement the estimated numbers discussed during pre-qualification, and gives you a clear picture of what you can afford.

During the pre-approval process, your lender will verify your financial information and take it as proof that you’re a strong candidate for a loan. Your lender will provide you with a personalized list of documents they need, but in general, be prepared to provide:

  • Paystubs
  • Bank, 401K, IRA, and stock brokerage statements
  • Two years of tax documents, including your filed tax returns, W-2's, and 1099's
  • Drivers license and social security card

If you are building a new home in Florida with Highland Homes, your New Home Specialist will provide you with a helpful New Homeowner Guide that includes a checklist of documents to gather for your pre-approval. Once your lender verifies this information and begins loan processing, they will provide a list outlining anything else they might need, and you can move forward with your new home purchase with confidence.

If you are looking at a used or resale home, having a pre-approval letter shows sellers and real estate agents you’re serious about purchasing a home, and provides you with a stronger overall offer package if you are competing against multiple buyers who want to purchase the same home.

About Highland Homes

As one of Central Florida and Tampa Bay’s largest home builders, Highland Homes is proud to build new homes designed for your life in communities throughout Central, North Central, Southwest, and Tampa Bay, Florida. Take the first step towards homeownership by getting pre-qualified with a Highland Homes lender partner, and find your new home in Florida by visiting www.highlandhomes.org/new-homes.

Information deemed reliable at the time of publishing; subject to change without notice. For the most up-to-date Lender Partners and mortgage financing information, visit www.highlandhomes.org/financing.

Tags: Credit score Home buying 101 Mortgage Mortgage pre-qualification Mortgage pre-approval