STEP 3 - PRE APPROVAL
Congratulations on Taking Action!
First off, congratulations on taking that first big step toward getting out of your expensive rent situation! You’re no longer just paying sky-high rent for a cramped apartment – you’re making the move to buying your dream home! This is a huge decision, and you’re headed in the right direction. Now, the next important step is getting pre-approved for a mortgage. By doing this, you’ll show sellers and lenders that you’re serious about buying a home. Let’s dive into what you need to gather to get officially pre-approved with a loan officer at a bank or financial lender.
STEP 3 - PRE APPROVAL
Congratulations on Taking Action!
First off, congratulations on taking that first big step toward getting out of your expensive rent situation! You’re no longer just paying sky-high rent for a cramped apartment – you’re making the move to buying your dream home! This is a huge decision, and you’re headed in the right direction. Now, the next important step is getting pre-approved for a mortgage. By doing this, you’ll show sellers and lenders that you’re serious about buying a home. Let’s dive into what you need to gather to get officially pre-approved with a loan officer at a bank or financial lender.
Pre-Approval FAQ's
1. Who do I contact to get pre-approved for a mortgage loan?
There are several ways to obtain pre-approval. You can reach out to mortgage lenders, brokers, banks, or credit unions. Alternatively, you can ask your real estate agent for suggestions. Just remember that the realtor does not receive any referral fees for these recommendations, as it is prohibited by law.
2. What does the lender do during pre-approval?
In the preapproval process, a lender reviews your credit report and assesses documents to confirm your income, assets, and debts. If you feel secure about your credit and your financial situation for purchasing a home, you can skip the pre-qualification step and proceed directly to preapproval.
3. Should I get more than one offer?
Talk to more than one lender. Looking at offers from different lenders can help you see different rates and fees, which could save you a lot of money over a 30-year mortgage. When you apply for preapproval, it may lower your credit score a little, but just for a short time. The good news is that if you apply for all your preapprovals within 45 days, it will only count as one inquiry on your credit report, not one for each lender. This is according to the Consumer Financial Protection Bureau (CFPB).
4. How far in advance should I get preapproved for a mortgage?
Mortgage preapproval is when a lender agrees to loan you a specific amount of money with certain conditions. This offer usually lasts for a set time, like 30 or 90 days. It's important to check the details to know how long your preapproval letter is good for. You should apply for preapproval when you're ready to start seriously looking for homes and feel prepared to make an offer.
5. Is a pre-approval a 100% guarantee?
Preapproval doesn’t guarantee that you’ll get a loan; your mortgage can still be denied. Before the loan can be finalized, a home appraisal is needed to make sure you’re not paying more for the home than it’s really worth. Also, if your financial situation changes between preapproval and closing, the lender might not keep their offer.
6. Can I buy things during the house buying process?
It's very important to avoid any financial changes after getting preapproved that could make you look risky to lenders. Don’t make big purchases while you're buying a house. Make sure to pay your loan and credit card bills on time. Also, don’t take on any new debts or open new credit accounts because it will affect your credit score and activity, and the lender could review your credit days before closing to make sure that your credit is still the same.
7. Do mortgage preapprovals affect your credit score?
Mortgage preapprovals can result in a temporary dip in your credit score. A mortgage preapproval counts as what is known as a hard inquiry. The CFPB says grouping hard credit inquiries within a 45-day period will reduce the effect on your score.
8. What’s the best way to get preapproved for a mortgage?
Before you ask a lender for mortgage preapproval, check your credit score and report. A higher credit score can help you get better mortgage rates. Mistakes on your credit report can make your score lower than it really is.
9. How long does it take to get preapproved for a mortgage?
Getting preapproved for a mortgage can take a few days or even longer. How long it takes depends on the lender and how quickly you give them the information they need, like proof of your income and assets.
1. Who do I contact to get pre-approved for a mortgage loan?
There are several ways to obtain pre-approval. You can reach out to mortgage lenders, brokers, banks, or credit unions. Alternatively, you can ask your real estate agent for suggestions. Just remember that the realtor does not receive any referral fees for these recommendations, as it is prohibited by law.
2. What does the lender do during pre-approval?
In the preapproval process, a lender reviews your credit report and assesses documents to confirm your income, assets, and debts. If you feel secure about your credit and your financial situation for purchasing a home, you can skip the pre-qualification step and proceed directly to preapproval.
3. Should I get more than one offer?
Talk to more than one lender. Looking at offers from different lenders can help you see different rates and fees, which could save you a lot of money over a 30-year mortgage. When you apply for preapproval, it may lower your credit score a little, but just for a short time. The good news is that if you apply for all your preapprovals within 45 days, it will only count as one inquiry on your credit report, not one for each lender. This is according to the Consumer Financial Protection Bureau (CFPB).
4. How far in advance should I get preapproved for a mortgage?
Mortgage preapproval is when a lender agrees to loan you a specific amount of money with certain conditions. This offer usually lasts for a set time, like 30 or 90 days. It's important to check the details to know how long your preapproval letter is good for. You should apply for preapproval when you're ready to start seriously looking for homes and feel prepared to make an offer.
5. Is a pre-approval a 100% guarantee?
Preapproval doesn’t guarantee that you’ll get a loan; your mortgage can still be denied. Before the loan can be finalized, a home appraisal is needed to make sure you’re not paying more for the home than it’s really worth. Also, if your financial situation changes between preapproval and closing, the lender might not keep their offer.
6. Can I buy things during the house buying process?
It's very important to avoid any financial changes after getting preapproved that could make you look risky to lenders. Don’t make big purchases while you're buying a house. Make sure to pay your loan and credit card bills on time. Also, don’t take on any new debts or open new credit accounts because it will affect your credit score and activity, and the lender could review your credit days before closing to make sure that your credit is still the same.
7. Do mortgage preapprovals affect your credit score?
Mortgage preapprovals can result in a temporary dip in your credit score. A mortgage preapproval counts as what is known as a hard inquiry. The CFPB says grouping hard credit inquiries within a 45-day period will reduce the effect on your score.
8. What’s the best way to get preapproved for a mortgage?
Before you ask a lender for mortgage preapproval, check your credit score and report. A higher credit score can help you get better mortgage rates. Mistakes on your credit report can make your score lower than it really is.
9. How long does it take to get preapproved for a mortgage?
Getting preapproved for a mortgage can take a few days or even longer. How long it takes depends on the lender and how quickly you give them the information they need, like proof of your income and assets.
What Do You Need to Get Pre-Approved?
There is a laundry list of items you need to get together for the loan officer. Here are the most common items you will need.
- Pay stubs from at least the past 30 days
You’ll need to show your income to the lender, so make sure you have your recent pay stubs ready. - Tax returns (including W-2s) from the past two years
Lenders need to see your tax history to ensure you’ve been paying taxes and what you’ve earned over the past two years. - Bank statements from the past two to three months
Be ready to provide statements from your checking, savings, or money market accounts to show how much you’ve saved. - Employment information
The lender will need to verify your employment for the past two years. Make sure to have your employer’s contact information handy. - Business records if self-employed
If you own your own business, be ready to show detailed records to prove your income. - Other income sources
Any additional income like bonuses, child or spousal support, or benefits like Social Security should be documented. - Account statements from the past two to three months
This includes any retirement or investment accounts, like 401(k)s or IRAs. Lenders want to see all of your financial assets. - Information on other real estate
If you own any other properties, have the details ready. This shows the lender your real estate history. - Loan statements from the past 60 days
Be sure to gather statements from any loans you’re currently paying, like auto loans, credit cards, or student loans. - Credit reports and scores
The lender will pull your credit report (with your permission) to see your credit score and check how reliable you are with payments. - Rental history
If you’ve been renting, the lender may want to see proof of rent payments and have your landlord’s contact info to verify your rental history. - Driver’s license or Social Security card
You’ll need to prove your identity, so make sure you have a valid ID like your driver’s license or Social Security card. - Recent residence addresses and tenure at each
Be ready to provide a list of the addresses where you’ve lived recently and how long you stayed at each place.
There is a laundry list of items you need to get together for the loan officer. Here are the most common items you will need.
- Pay stubs from at least the past 30 days
You’ll need to show your income to the lender, so make sure you have your recent pay stubs ready. - Tax returns (including W-2s) from the past two years
Lenders need to see your tax history to ensure you’ve been paying taxes and what you’ve earned over the past two years. - Bank statements from the past two to three months
Be ready to provide statements from your checking, savings, or money market accounts to show how much you’ve saved. - Employment information
The lender will need to verify your employment for the past two years. Make sure to have your employer’s contact information handy. - Business records if self-employed
If you own your own business, be ready to show detailed records to prove your income. - Other income sources
Any additional income like bonuses, child or spousal support, or benefits like Social Security should be documented. - Account statements from the past two to three months
This includes any retirement or investment accounts, like 401(k)s or IRAs. Lenders want to see all of your financial assets. - Information on other real estate
If you own any other properties, have the details ready. This shows the lender your real estate history. - Loan statements from the past 60 days
Be sure to gather statements from any loans you’re currently paying, like auto loans, credit cards, or student loans. - Credit reports and scores
The lender will pull your credit report (with your permission) to see your credit score and check how reliable you are with payments. - Rental history
If you’ve been renting, the lender may want to see proof of rent payments and have your landlord’s contact info to verify your rental history. - Driver’s license or Social Security card
You’ll need to prove your identity, so make sure you have a valid ID like your driver’s license or Social Security card. - Recent residence addresses and tenure at each
Be ready to provide a list of the addresses where you’ve lived recently and how long you stayed at each place.
WHAT DO YOU DO NOW?
So now you know what to do to get pre-approved for a mortgage loan. So I need you to immediately take action and apply for a loan tomorrow!
Goto Google and type in your city and look for a local mortgage broker or a bank or credit union.
This is your task. Don't overthink it. Just do it. Get it out of the way, because once you get approved, you now know the price of a house you are qualified to buy.
So get all of your documents ready, and walk right into the lenders office or bank and get pre-approved. Do it now!
So now you know what to do to get pre-approved for a mortgage loan. So I need you to immediately take action and apply for a loan tomorrow!
Goto Google and type in your city and look for a local mortgage broker or a bank or credit union.
This is your task. Don't overthink it. Just do it. Get it out of the way, because once you get approved, you now know the price of a house you are qualified to buy.
So get all of your documents ready, and walk right into the lenders office or bank and get pre-approved. Do it now!
WHAT'S NEXT?
After you get your approval letter, now it's time to go the next step. You will need to sit down and prepare your house buying criteria. The real estate agent that you hire will need this information so they can help find you the exact property that you are looking for,
So, click the link below to go to the next step.
After you get your approval letter, now it's time to go the next step. You will need to sit down and prepare your house buying criteria. The real estate agent that you hire will need this information so they can help find you the exact property that you are looking for,
So, click the link below to go to the next step.
