Buying your first home can be a daunting task. A large number of first time homebuyers have certain misconceptions about loan pre-qualification and are often confused about it. Take a look at the top 5 misconceptions regarding mortgage pre-qualification:
Avoid preparing for pre-qualification: Most of the first-time homebuyers feel that there's no need to prepare for pre-qualification. However, all first time buyers should make it a point to prepare for a pre-qualification just as they would prepare for a mortgage. There are various factors included in pre-qualification. Even though paperwork is not required, the more precise they can be, the better it will be for the lenders as they will be able to let you know how much loan you may get. Thus, you should carry documents like last month's pay stub, proof of employment, tax returns statements of two years, etc.
Exaggerating: It doesn't make any sense to fudge when you apply for a mortgage. You should make sure that you're forthright and accurate while giving the required details. If that's not the case, then you might damage your credibility.
Considering pre-qualification same as loan: Most of the first-time homebuyers consider that pre-qualifications and loans are the same thing. But that's not the case. Both of these are two different concepts. Unless you're approved for a loan, the lender has no commitment toward you. Loan pre-qualification is not a commitment. To know the difference between pre-qualification and pre-approval, check out: http://www.mortgagefit.com/qualification-approval.html .
Obligation toward the lender: First time homebuyers think that they are obliged to take out a loan only because they have chosen one lender to work with. It is true that most lenders will encourage you to work with them but you're not obligated to do that. You may choose others lenders over him.
Avoid researching about the lender: The first time buyers don't consider it important to research about the lender when they apply for mortgage pre-qualification. So, you should shop around and check out who gives you the best advice regarding your loan.