There was a time when getting a mortgage was as easy and common as shopping for groceries. Unfortunately, that is no longer the case. There are, however, options available now to make the process easier; they are essential, and in some cases required. One step is to get pre-approved for a mortgage. This means a mortgage lender has reviewed your financial standing and given you authorization to look for a mortgage for a certain price with certain terms. It is far more efficient and effective to get pre-approved before starting a home search - this way you go into the process more secure about what is realistic for your situation and confident to find what you are actually looking for.
Here are some advantages to consider when deciding on getting a pre-approval:
1. Quicker approval process when applying for a home mortgage
2. Buyers are taken more seriously by agents and sellers when looking for a home
3. Credit issues and potential problems can be addressed ahead of time, proactively
4. Buyers with a pre-approval are far more likely to win a bidding war if the other party is not similarly positioned
5. The home search is narrowed to properties that are realistic for the buyers - making it a far more pleasant and efficient process for all
involved
When going for pre-approval, there are a few things you will need for all applicants (if this is a purchase where both spouses financials are required to secure the loan, both parties information is required):
1. Previous two years W-2 statements (or 1099 if self-employed/contractor)
2. Federal tax returns for the last two years
3. Bank statements for the last 3 months
4. Recent pay stubs and proof of other income
5. Proof of investment income (if you have it).
With this information on hand, you will be well on your way to being pre-approved. It is important to keep in mind that a pre-approval letter states that at that time you are eligible for a particular loan amount with certain terms. It is not a promise to fund a loan and does not guarantee any rates or conditions. It is simply a letter that should go with you when you are searching for a home and lets the agents know you are ready to stand behind a legitimate offer within your price range.
If you're in the market for a home or just thinking about it, give me a call or apply online. Click here to get your loan process started. I can help you get pre-approved getting you one step closer to your dream home.
