Qualification Process

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How to qualify for a home loan,

and determine how much you can afford to borrow.

When you’re ready to purchase a home, prove you’re a serious buyer by obtaining a prequalification letter. A prequalification requires an evaluation of your credit worthiness based on your income, assets, debts, and past credit use. By evaluating these factors,


Along with your income, assets and debts, your history of credit management is an important factor when applying for your home loan qualification. Three national credit reporting agencies continuously monitor your use and re-payment of credit, including credit cards, car loans and any other short- or long-term loan. All three agencies report information in five distinct categories:

  • Identification – your name, address, social security number, employer, date of birth, and spouse’s name (if applicable).
  • Credit History – current and past payment history of all open and paid accounts. Negative information, such as late payments, can show up for seven years, while bankruptcies can remain for up to 10 years. You should contact the appropriate credit agency and dispute any information you feel is not true.
  • Collection – any creditor who has turned over an account to a collection agency may be listed.
  • Public records – items of public record that affect your finances such as bankruptcies, divorce decrees, child support, and other judgments are listed.
  • Inquiries – anyone who has checked your credit in the past 18-24 months will be listed.


Because each credit agency has different reporting techniques, and since two or more credit reports will be compared when evaluating your home loan qualification application, you should know what each report contains and correct any errors. You can, and should, dispute any mistakes. You can order your credit report or dispute information that it contains by contacting the agencies listed below.

PO Box 740241
Atlanta, Georgia 30374
(800) 685-1111

Trans Union
PO Box 390
Springfield, Pennsylvania 19064
(800) 888-4213

PO Box 949
Allen, Texas 75013
(800) 422-4879

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