HOW TO GET PRE-APPROVED FOR A MORTGAGE LOAN
Here are the steps you need to take to get pre-approved and the most important facts you need to get you there.
WHAT IS A PRE-APPROVAL?
It’s a written statement from a lender stating that you would qualify for a particular loan under your current qualifications and the lender’s guidelines. A pre-approval letter is good for 60-90 days and the loan amount is based on your income and credit information.
A pre-approval letter is not an offer to lend, a commitment to make a loan, or a guarantee of specific rates or terms. It is however an accurate idea of how much home you can afford. And most importantly as a homebuyer, it’s proof to sellers that you have done your homework and are serious about purchasing.
PRE-APPROVAL VS. PRE-QUALIFICATION
Getting pre-approved and getting pre-qualified are two very different things and only the pre-approval holds much weight as a potential homebuyer. A pre-qualification does not go as depth into your finances as it does not include an analysis of your credit report. To be pre-qualified you simply give a lender an idea of your debt, income and assets (no paperwork, just your word) and a lender can discuss your potential options.
OBTAINING A PRE-APPROVAL LETTER
First and foremost you need to choose a mortgage lender. Keep in mind that each lender has its own standards and processes for determining whether to grant a pre-approval letter. However, in general you will have to complete an official mortgage application and supply the lender with all of your pertinent information.
PAPERWORK TO PRESENT TO YOUR LENDER:
- Proof of income
- Proof of assets
- Proof of employment
- A good credit score
- Personal documentation i.e. copy of your divers license, Social Security number, and your signature on lots of paperwork!
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