GET INTO THE HOME-BUYING PROCESS: MORTGAGE PRE-APPROVAL IS CRITICAL!
As the current real estate market heats up, one of the most important decisions of your life about to get underway. Savvy sellers are preparing to list their homes with whatever time they need to sell and close. But YOU only have the chances before you – and you need the advantage of “Pre-Approved” Status.
If you’re in the market to buy a new home, you’ll want to be at the top of your game, too. So, it may be time to find a mortgage lender and get pre-approved to buy. At the very least, it is time to figure out exactly what pre-approval means and how it could play a role in your home-buying process!
For many, mortgage pre-approval is the first step in that process. Before even beginning to browse homes, it is wise for potential buyers to seek out a lender to find out how much they may be able to borrow. Then, they are able to determine a reasonable home-buying budget and start searching for homes.
In addition to knowing their buying limits, buyers who obtain mortgage pre-approval also are seen as more viable buyers. From a seller’s perspective, a buyer that has taken the time to gain mortgage pre-approval already has been vetted. They hold that precious piece of paper that says “Yes, I can afford to buy the home you’re selling!”
So, how do potential buyers get that coveted mortgage pre-approval letter?
First, they find a lender and learn about available loan options. Then, it is time to determine their budget. In order to do this, lenders need potential buyers to submit a few items:
- Mortgage Application: Yes, buyers still need to fill this out even when they are only seeking preapproval.
- Photo Identification/Social Security Card: Lenders need this personal information to check a buyer’s credit score and history. For buyers, the better your credit is, the better borrowing rate a lender may offer!
- Proof of Income: Lenders may want to see W-2 statements and tax returns from the past two years as well as a buyer’s last few months of pay stubs. In some cases, lenders may even want to confirm employment by talking to a buyer’s employer!
- Proof of Assets: Lenders will want to ensure that buyers have enough money to meet their down payment requirements. To do this, they may ask to take a look at a buyer’s most recent bank statements. If a buyer is expecting gift money from a family member to contribute to their down payment, their lender also may want to see a gift letter to verify the money.
After a lender has seen all required documentation and properly vetted a buyer, they may issue a pre-approval letter, stating how much the buyer is currently eligible to borrow. Typical mortgage pre-approval letters are good for 90 days.
If a buyer’s home search or closing process goes beyond 90 days, they may need to submit updated documentation in order to extend their pre-approval or gain final mortgage approval. But, buyers should note that even if they find a home during that 90-day period, the home must still be appraised before a lender will grant final mortgage approval.
Have you gone through the mortgage pre-approval process yet? Put yourself in the best position to BUY by seeking mortgage pre-approval from your chosen lender today – or contact me for the name of a phenomenal one. I have used his services now several times and he is fair, honest and efficient. CALL me at 401.741.9130 for details!