Professional tips on pre-qualifying for your mortgage

Being prepared is one of the smartest things you can do to help the home buying process go smoothly. Getting professional help is a big advantage at different stages of your house hunt, from helping you prepare your budget and set your expectations, to strengthening your negotiating position with the seller when you're making an offer on a home.

Despite the loan amount you're pre-qualified for, stick to the amount you can comfortably afford. Your lender may pre-qualify you for more than you think you can manage. If this happens, you can always scale back to a lower loan amount. You're not required to share your loan amount with realtors. Ask them to only show you homes in the price range that fits your financial comfort zone.

Become knowledgeable about your pre-qualification process

• Pre-qualification is an estimate of what you might be able to borrow
• It provides an estimate of your borrowing power
• Based on information you provide about your income and assets
• Sometimes requires a credit check
• Can often be done online
• Offered by most lenders at no cost
• Not comprehensive and not guaranteed or considered as a loan commitment

Why get prequalified?

Once you've built your budget and know how much of a monthly payment you can comfortably afford, getting prequalified allows you to estimate the loan amount and type that's right for you. Then, when you're searching for a home, you'll know which homes are in your price range.

Why get conditionally approved?

A conditional approval is a more serious step toward buying a home. It is a conditional commitment in writing for a specific loan amount and loan program. Provided all the specified conditions are met, the lender is obligated to go through with the loan; however, you are free to walk away from this commitment before anything is signed. It will also give you a general idea of your interest rate and potential monthly payment.

It's important to note that while prequalification can give you an idea of what you could borrow, the amount you should borrow should never be more than what you can comfortably afford.

Pre-qualification is neither pre-approval nor a commitment to lend; you must submit additional information for review and approval.

Conditional approval is subject to satisfactory appraisal and title review and no change in financial condition. If the rate is not locked or rate protection expires, any rate increases may lower the conditionally approved loan amount.