How Do I Get Pre-Approved For A Mortgage?

I get several calls each day form potential Borrowers with mortgage questions.  The questions range from "what is your interest rate", "why do I have to pay points", "what are closing costs", "what is PMI", "how do I fix my credit", as well as several others.  But the one question that I am asked most often by far is How Do I Get Pre-Approved  For A Mortgage?

One of the reasons why this is the most asked question for me is because the majority of the Borrowers that I work with are First Time Homebuyers, but it is also a frequently asked questions by Borrowers that have gone through the process before.  The answer is simple, and the initial process is quick.  80% of what I need to know to Pre-Approve a Borrower for a mortgage, can be obtained in about 10 minutes.  The information that I initially need is:

• A Credit Report, so I need:
• Their legal name
  
• Their Social Security Number
• Their home address
• Determine their Debt-To-Income Ratios, so I need to know how they are paid:
• If Salary, what is the yearly salary without bonuses
• If by the hour, what is the hourly rate, and how many hours per week they work, without over time
• If Self-Employed, what is the Net Gross Income on schedule "C" of their tax returns for the last two years.
• If Commission, have they been receiving it for at least two years, and do they take business deductions.  If they do what is the Net Gross Income on schedule "C" of their tax returns

(There are other income questions, but these are the four most common)

 

With this initial information I can pull credit, determine the Debt-To-Income Ratios, and begin to establish what price property they can possibly qualify for.  Also based on this initial information, I will either go on to complete a full application, or stop right there until we correct whatever needs correcting, especially credit scores. But let's say everything is good, I then go on to collect the following information:

• Contact information, such as phone numbers, and e-mail address
  
• Date of birth
  
• Where they have lived for the past two years
• Where they have worked for the past two years
• Additional income if any
  
• Bank information
• Series of "Yes" and "No" questions.

With this information, I can then run the file though Desktop Underwriting (DU), and have a very good idea if they qualify or not.  Of course at this point, I am basing my opinion on what they have told me, and still have to verify the information, by collecting:

• Paystubs
• Tax Returns (if needed)
• Bank Statements

For most Borrowers the above is all I need, but there are times that other information might be needed to determine what they can be Pre-Approved for.  If that is the case the Pre-Approval Process can take much longer, especially if they have lived, and worked at several places in the last two years.  Obtaining bank information, and necessary funds to purchase a home can also be time consuming at times, but for the most part an initial Pre-Approval can be done in approximately 30 to 45 minutes.

As often as I hear How Do I Get Pre-Approved For A Mortgage? I never get tired of it, and am always ready to help Borrowers get Pre-Approved to purchase their dream home.

 

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 Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com