2. Pre-Qualifying for a Loan

1. Repeat

A: I need to see if I qualify for a home loan.

B: I can help you. How much money do you make per year?

A: I make around one hundred thousand dollars per year.

B: How long have you been on your current job?

A: I have only worked at this job for 6 months, but I have a longer job history elsewhere.

B: Do you have any other outside income from rental property or a trust?

A: No, I only receive my salary.

B: Do you know your credit score?

A: I think that it is around 600.

B: By crunching the numbers and putting in your expenses, I estimate that you can afford a house of around five hundred thousand dollars.

2. Repeat

A: I am trying to see if I can afford to purchase a home that I wish to buy.

B: We can figure that out right now. How much do you earn annually?

A: My wife and I earned one hundred and fifty thousand dollars last year.

B: How many years have you held your current position?

A: I have been at my current job for 10 years.

B: Is there any extra income that you receive other than salary?

A: I collect one thousand dollars a month from a rental property.

B: Have you ever figured out your credit score?

A: I try not to think about it!

B: Adding in your expenses, I calculate that you can spend three hundred thousand on a house.

3. Repeat

A: I want to go house shopping, and I want to know what I can afford to buy.

B: There is a formula that can help us figure that out. What is your annual salary?

A: I earn sixty-five thousand dollars per year.

B: What is the length of time that you have worked at the job you have now?

A: I have been at the job I now have for 2 years, and I have been with the company for 6 years total.

B: Do you receive any other income?

A: I own a small rental unit with a partner, and I receive five hundred dollars a month from that unit.

B: Do you know what your credit score is?

A: I don't know, but the last time I checked, it was very good!

B: You are in good shape. Figuring in your other expenses, you can easily afford a house costing seven hundred thousand or maybe even a little more!

Practice the Conversations of This Topic with Mike