What is a Pre-Approval? A Pre-Approval provides an estimate of how much a borrower can afford in a monthly mortgage payment. The process includes the evaluation of a buyer’s finances, including: credit score, debt, income, and available assets. After these factors are reviewed, the mortgage company will issue a Pre-Approval documenting how much they will lend a borrower, the loan programs they qualify for, and the interest rate they will be offered.
How do I get Pre-Approved? A buyer must contact a Loan Officer who will gather all of the relevant financial information needed for the lender to make a determination on mortgage financing. Once that information is obtained, the Loan Officer can provide a Pre-Approval. With your permission, they will run your credit to obtain your credit score. They will also verify your employment, debt, income, and assets.
What will I need to provide? A Loan Officer will instruct you on the required information and documentation needed. They will typically request the following: W2’s: last 2 years (if applicable, or 1099’s instead), Income Tax Returns: last 2 years, Bank Statements: most recent 2 months, Pay Stubs: most recent 2 months
What are my Options? A mortgage is not a one size fits all, there are many types of loan programs. Mortgage loan programs can vary considerably on what they offer and how they're structured, including: terms, rates, and eligibility. A review of a borrower's finances and qualifications will dictate what programs they may be eligible for.
Why get Pre-Approved? If you've been Pre-Approved for a mortgage, you can shop for a home with more certainty because you know what you can comfortably afford and you will have everything in place to move quickly when you find the home you want. Also, sellers will not seriously entertain an Offer to Purchase without the buyer providing a Pre-Approval letter. This is needed as proof that a buyer is financially qualified and can move forward with the purchase of the property. Having a Pre-Approval makes you a genuine buyer in the eyes of sellers and real estate brokers. This shows that a buyer is serious and financially qualified.
Once I’m Pre-Approved, then what? Now you can start shopping for your new home.
Tip: Work with a well-known, local lender. By working with a reputable, local lender, you increase your chances of having a better mortgage experience. It will also help you when the time comes to make offers, because of your lender’s credibility. When Realtors recognize your lender and have had positive experiences with them, it gives Realtors more confidence that your mortgage process will move forward smoothly. This can also translate to your offer being viewed more favorably.
With so many companies and types of lenders to choose from, it can be difficult to know where to begin. I have many established relationships with professionals in the mortgage industry and will gladly provide you with qualified recommendations. Simply, complete the form below or contact me to get the process started and we'll bring you one step closer to your new home.