The Home Loan Pre-Approval Process
The first step to securing as much purchasing power as possible is to know how much home you can afford. The home loan pre-approval process will provide you with that number and add power to your side should a bidding battle begin over a home you want to buy.
Once you are pre-approved, the lender can offer you a pre-approval letter to show to real estate professional and home sellers. Keep in mind that you will still need to apply for the mortgage loan when you choose a specific house.
The first thing you want to do is meet with a lender to discuss your needs. The lender will look at various things like your debt-to-income ratio and credit report. The process is more in depth for a pre-approval, so be prepared ahead of time and bring along the proper documents.
Social Security Cards
Most of us don’t carry these around with us on a regular basis, so you may need to access a safety deposit box or another secure locations to add these to your documents. You’ll need the card for anyone whose name will be on the mortgage loan for the house. Place cards in a small envelope to keep them from getting scattered during transition. When you’re done, be sure to return the cards to a safe location.
Checking and Savings
Bring along six months of checking account and saving account statements. If you have these delivered in the mail each month, you can gather them into a folder. Many people get their statement online. In this case, you’ll need to visit your financial institution ahead of time and have them print out the statements. They may charge you a fee for this information.
Documentation of Assets
Bring along the documentation for any stocks or bonds you own. Similarly, if you own other real estate property, be sure to bring along the documents related to their worth.
Pay Verification
Most lenders will want a minimum of two months of pay stubs or earnings statements. This needs to be official documentation that can be verified. It will need to include the name of the company, the address, and the phone number of someone who can be contacted to verify your employment. It’s a good idea to bring along work related references and any information related to recent jobs.
Credit Cards
Gather up all your credit card statements for the last 6 months and secure them in a folder. You’ll want to access your account online and look into printing out statements if you do all your accounting online. You may need to get information directly from the credit card company, so plan ahead and leave enough time for mailing delays.
Taxes
Most lenders will want to see the last two years of your tax returns. Remember, your tax returns hold important information, so be sure to place them back in a secure location when you are through using them for the pre-approval process.
The length of time is takes to receive your pre-approval decision and letter varies depending on the policy of the lender. Be honest in all your documentation and answers when being asked a question. This is not the time to shove information about a negative checking account or tax repayment under the rug in the hopes that the lender won’t learn about the information. The lender is going to learn all about your finances, and it’s best if there are no surprises.
The Laura Castillo Group can help you sort out the home buying process and make things less stressful. Call them today at 806-401-4217 to discuss your buying power. Wondering what your current home is worth? Check our home value estimator. Take a look at the Monthly Market Report for Midland, TX.
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