How to Figure Out What You'll Be Pre-Approved for in a Home Mortgage
- 1). Give the lender permission to pull your credit history. Lenders use credit reports and credit scores to determine whether applicants are eligible for a loan, and the interest rate on the mortgage. Complete a mortgage application and include your personal information such as name, address and Social Security number. Credit reports also reveal outstanding debts and monthly debt payments, which also factor into figuring pre-approval amounts.
- 2). Forward copies of your most recent income statements to your lender. As a general rule, mortgage payments should not exceed 28 percent of gross monthly income, and total monthly debts should remain below 36 percent of gross monthly income, says the Home Loan Learning Center. Provide the lender with your most recent complete tax return or paycheck stubs.
- 3). Submit copies of bank statements. The mortgage lender may ask to see original bank statements from the past two months to evaluate present assets and banking habits. A habit of bouncing checks or fees for insufficient funds can have an affect on mortgage approval. Lenders may also request a bank statement to confirm a borrower's ability to pay the required down payment on a mortgage loan.
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