Prequalification is the first stage of the loan home purchase process. The following screen determines an estimate on the amount of loan you can qualify for.

When qualifying for a loan, no more than approximately 36% of your gross income can be used to pay for your total monthly payments (Including the new loan). This is the qualifying ratio and will vary between lenders. Your monthly income is used to base your maximum loan amount and maximum purchase price.

To determine the maximum loan amount you can obtain, make a projection as to how much of a down payment you can afford. A larger down payment will decrease the loan amount. Increase the down payment by cashing in stocks or other investments, adding a gift (money) from parents, etc. If your down payment does not meet the required amount for the loan your salary will obtain, you will need to re-calculate using either a larger available figure, or lower your debts or interest rate.

Your Available Funds should be a representation of your total savings. This program will use this in several ways. First and most prominent is the Down Payment. Roughly 80% of your available funds will be used for Down Payment, Closing Costs, and Other Costs required to obtain the loan.

Prequalification Worksheet

Calculations for a prequalification worksheet are based on:

• Gross Monthly Income: (Base, overtime, commission, investments, etc.)
• Debts: Monthly Payments (Credit card accounts, auto loans, etc.)
• Cash Available: Total of your cash assets (Savings and checking accounts, etc.)