How Do I Get Pre-Approved for a Loan?
Shopping for a home may begin as a pleasant experience. In fact, you’re probably looking forward to what the future has to offer. However, serious homebuyers need to consider the financial aspect of home buying. The process all begins in a lender’s office, not at the open house. Potential buyers should always consult with a lender first and obtain a pre-approval letter before seriously considering a home. You’ll have an advanced opportunity to discuss loan options and budgeting, too. The benefits outweigh a headache.
Pre-Qualification vs. Pre-Approval
When it comes time to buy a home, many prospective buyers get excited to hear they’ve received pre-qualification. While useful to estimate how much you can afford, a pre-approval is more valuable. Pre-approval essentially means the lender has checked your credit, verified your paperwork, and approved a loan amount. The loan amount is typically viable for 90 days. Final approval occurs once the appraisal is complete.
What You’ll Need
The process to receive pre-approval for a mortgage is relatively straightforward. All you’ll need to do is provide your lender with some documentation beforehand. This documentation includes:
- Income – You’ll need to supply your lender with pay stubs, tax returns, and W-2s from the past two years, plus documents showing any other source of income. Other sources of revenue may include overtime, commissions, bonuses, interest, retirement benefits, or child support, to name but a few.
- Assets – Your lender may ask to see other assets, separate from your income. This may include bank account statements for all investments, other property, and gifts from family or friends on a regular basis.
- Personal – Personal information, including Social Security, driver’s license or passport, and credit information, will be needed.
If you’re preparing to buy a home, contact Cindy Petty Realty by calling (469) 360-9917. We’re happy to answer any questions you may have!