If you’re thinking of buying a home, getting a pre approval letter is a good idea. It puts you ahead of the game and shows sellers that you’re serious about the process. While the preapproval letter isn’t the only thing that can put you on the fast track to closing on a house, it’s a great way to impress a seller.
The pre-approval process takes a little time and requires a few things. First, you need to collect your financial documents. These include your income, credit and debt information, as well as your assets. This will be used to determine your loan amount and interest rate.
After the lender reviews your documents, you’ll be contacted with your pre-approval letter, which will be valid for 90 days. You may also need to provide additional documentation such as tax returns, a business license and a notarized statement from an accountant. In addition, the lender will need to verify your employment, pay stubs and other financial data.
While the pre-approval process is fairly standard, it doesn’t mean you don’t need to do your homework. For example, you will need to know how much you can afford, your down payment, the type of loan you will apply for, and how to manage your expenses.
Getting a pre-approval is the first step to getting a mortgage. Once you’ve been approved, you’ll want to find a lender that has a mortgage program that fits your needs. A lender can give you advice and help you find a suitable home. But, if you don’t start the process as soon as you find a house that you like, you might end up waiting months before you get a home of your own.
While the pre-approval letter isn’t a guarantor, it does tell the seller that you’re serious about buying the house and that you’ll be able to make the monthly payments. Your lender will need to review your credit and financial situation to ensure you can qualify for a mortgage.
Once you have the pre-approval letter, you can start searching for homes. A realtor can help you find your dream home and stay with you throughout the closing process. When the housing market is hot, houses go fast, and you’ll want to be one of the first to put in an offer.
If you don’t find a home within the 90-day period, you can reapply for a pre-approval. Just be sure to follow up with your lender to find out if you’re still eligible. However, if you don’t hear from your lender within that timeframe, it’s best to move on.
Pre-approval is a big step toward owning your own home, and it can be stressful. It can feel financially intrusive, but it can give you an edge over other buyers who haven’t been pre-approved. Getting a pre-approval can even be a golden ticket, especially if you haven’t seen anything that you’re interested in yet.
As long as you follow these tips, you’ll have no trouble obtaining your pre-approval and getting a mortgage. Make sure you keep all the required documents and paperwork updated. Don’t hesitate to ask your mortgage broker if you have any questions.