Getting pre-approved is an important part of the home-buying process. It enables you to shop confidently for a home. We want to make sure that you are looking for homes in a price range that will result in payments that you can comfortably afford.
When you are ready to make an offer on a home, your real estate agent will ask me for a revised pre-approval that is specific to the property on which you are making an offer. In order to do that, I will need to verify through documentation, some of the items we discussed over the phone.
Preapproval Documentation
I will send you a list of required documentation. Please return these to me as quickly as possible to ensure a rapid process. Also, whenever providing documentation throughout the entire loan process, make sure to provide complete and legible documentation. For example, if asked to provide bank statements, make sure to include all pages of the bank statements, even if some of the pages include advertising. The same is true for tax returns, paystubs, or any document—all pages of the document must be included.
I will also send you a file with loan disclosures. Please print these disclosures , sign/date them and return to me by fax at your earliest possibility. Keep in mind that these disclosures are based on a hypothetical purchase price, taxes, insurance and interest rate. All of these things and more are subject to change between now and the time that you buy your home.
Preapproval Process Tips
Now, here are some tips to pay attention between now and the time you are ready to move into your new home:
1) Try to avoid any substantial changes to your credit. Increasing your debt load, or missing a monthly payment can affect your ability to pre-qualify.
2) Please communicate any changes in your job status. A shift in compensation, hours, or changing to a new job can affect the loan decision.
3) If we are able to offer you a pre-approval, keep in mind that it will have an expiration date. In other words, if your house search goes on for a while and results in a closing date that will exceed your pre-approval expiration date, we will need to update your file with a new credit report and loan documentation.
4) And we must include the following statements: “Final qualification or approval is not guaranteed” and “approval may be subject to additional review”.
5) Avoid “NSF” checks (bounced checks) on your checking account as this is one important credit item that is not typically reported to a credit bureau but can influence an underwriter’s loan decision.
6) Keep in mind that your loan file is reviewed thoroughly again as recently as a few days before closing, often resulting in pulling a new credit report. Substantial changes in credit score or debt payments may alter or change an underwriter’s approval decision. The important point here is to try and avoid substantial changes to your credit, income, assets, and debts after your pre-approval.
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