How to Get Prequalified for a Mortgage: 5 Steps to Get Started

Mortgage prequalification gives you an estimate of how much a lender may be willing to lend based on your financial information. Whether you’re a first-time homebuyer or planning your next move, it can help you focus your search and identify questions to address before applying for a home loan. 

Mortgage Prequalification vs. Preapproval: What’s the Difference? 

Prequalification generally provides an initial borrowing estimate based on information you share about your income, debts and savings. Mortgage preapproval typically involves a more detailed review, including credit and financial documentation.

Lenders use these terms differently, so ask what their process includes. Neither prequalification nor preapproval guarantees final mortgage approval. 

1. Review Your Credit Reports 

Before contacting a mortgage lender, check your credit reports for errors or unfamiliar accounts. Addressing issues early can help prevent surprises. 

You can access free weekly credit reports from Equifax, Experian and TransUnion at AnnualCreditReport.com. Free reports used to be available only once a year, but weekly access is now permanent. 

2. Gather Your Financial Information 

Be ready to discuss your income, employment, monthly debt payments and savings available for potential down payment and closing costs. 

Depending on the lender’s process, you may also need documentation. Gather recent pay stubs and bank statements, and ask your lender what additional documentation may be required based on your situation. Self-employed borrowers or those with seasonal income may need more extensive documentation. Having these materials ready can make the next steps easier. 

3. Set a Comfortable Homebuying Budget 

The amount you qualify to borrow may be higher than what you want to spend. Consider the full cost of homeownership: principal and interest, property taxes, homeowners insurance, any mortgage insurance or association fees, and ongoing maintenance. 

Leave room for everyday expenses, emergency savings and other goals. Your mortgage budget should support your life beyond your new front door. 

4. Compare Mortgage Lenders and Loan Options 

Look beyond the advertised mortgage interest rate. Compare closing costs, loan terms and Annual Percentage Rates (APR). 

Ask about down payment possibilities and options that fit your situation. Service Credit Union offers first-time homebuyer programs and VA mortgages, including low- or no-down-payment options for eligible borrowers. 

5. Request Prequalification and Confirm Next Steps 

Contact your lender and provide the requested information through their application process. Before authorizing a credit check, ask whether it will involve a soft or hard inquiry and how it may affect your credit score. 

Once you receive a borrowing estimate, consider asking what information still needs verification, how long the estimate or letter remains valid, and what you’ll need when you’re ready to make an offer. 

Start Your Mortgage Journey With Service Credit Union 

You don’t have to navigate home financing alone. Explore Service Credit Union’s mortgage options and connect with our real estate lending team for personalized guidance on getting prequalified and taking your next step toward homeownership.