Are you thinking of purchasing a home in the near future? It’s best to get pre-approved before beginning your search so you have an idea of what your budget is. There’s no need to waste time looking at houses not in your price range. Pre-approval is also important when it comes to approaching sellers and making offers. If a seller receives three offers but only one of the buyers have been pre-approved, they’ll take the pre-approved offer more seriously. There is security in accepting an offer that already has financing in place and is certain.
Here are a few things you will need for the pre-approval process:
Social security number
Credit history will need to be pulled so have your social security number handy. Other parties involved with the mortgage loan will also need to have their credit history reviewed.
Proof of income
Typically, lenders will request pay stubs for the past 30 days. Some lenders will also verify employment and request a list of employers for the last two years. This ensures the borrowing party is able to actually repay the loan.
Be prepared to show federal tax returns and W2s for the past two years. This information can get a little tricky if you are self-employeed or work on a contract basis. Check with your lender for details.
Lenders request 60 day or quarterly statements of all asset accounts including checking, saving and investment accounts.
A few other things lenders may need include your residential address for the past two years, monthly expenses, current real estate holdings, other asset statements and new monthly debts not listed on the credit report. Requirements vary so check with your bank or lending company to make sure they have exactly what they need. Your real estate agent and mortgage loan representative will work closely with you when it comes to the mortgage pre-approval process!