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Ready to buy your next home? As a prospective homebuyer — or as a real estate agent — you want to make sure you know what you need to qualify for a home loan. In order to prepare for this huge step, here is a home loan prequalification checklist.

What is prequalification, exactly?

First, it's important to note that prequalification can be a good first step in the home-buying process. If you're looking to get a mortgage, you'll want to get prequalified by a reputable lender first. This is an easy process, but it's important to remember it's not the same as being pre-approved for a mortgage. (Some lenders may use these terms interchangeably.) The process of prequalification takes a look at your numbers and gives you an idea of how much you may be approved for when applying for a mortgage. The result isn't set in stone, but it's a good starting point, and we're happy to help you get started.

In order to get prequalified for a home loan, here's what you will need:

  • Income – A lender wants to know how much you can reasonably afford for a mortgage given your current income.
    • Your W-2 forms and paychecks are a good resource to understand what your collective income is.
  • Assets – On top of your income, a lender may want to know how your overall financial health is to determine if you can handle a responsibility like a mortgage.
    • You will want to have an overall idea of your combined assets, savings, and real estate.
  • Debts – A lender wants to know how much debt you have and look at your overall debt-to-income ratio in order to assess what you may be able to afford.
    • Not sure what your debt-to-income ratio is? We’ve got you covered. This article explains everything you need to do.
  • Credit – A peek into your credit history can offer a lender an idea of how responsible and creditworthy you are.
    • Ensure that you are taking the steps in the right direction to build up a good FICO score.

The good news is that with this information, you may be able to be prequalified by a lender, and you can complete the process in-person or by phone.

Having a prequalification letter can show that you're really serious about buying a home and can open doors in the home-buying process and make the mortgage process much easier. It can save you time and a lot of hassle so that you know what you can actually afford.

If you have questions, we have answers.

The home-buying process can seem a little daunting and even intimidating. Don’t worry, we’re here to help you every step of the way. We’ll take you through the entire process, answer all your questions, and always keep you prepared for what’s next. When it comes to getting you into your new home, our line is open until you close.

Contact a Mortgage Loan Officer

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.

By selecting any external link on key.com, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend or guarantee any product or service available on that entity's website.

NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. Information and offers are subject to change without notice. All loans are subject to credit and collateral approval. Not all loans or products are available in all states.

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