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Get
Pre-Approved
Join our writer, Chris
Rocks, in a look at how pre-approval for a mortgage loan will
make your life easier. Learn the benefits of pre-approval such
as realtors spending more time with you on your search for a new
home.
Why Get Pre-Approved
For A Mortgage?
One of the most important
steps in the home buying process is getting Pre-Approved as early
as possible.
The Pre-Approval process
involves you speaking with a Mortgage Lender about your financial
situation, what you'd like to accomplish, and any concerns you have.
Armed with that information, a Mortgage Lender can obtain an approval
from a lender up to a specified loan amount and provide you with
monthly payment information and closing cost information.
There are many benefits
to getting Pre-Approved. First, Realtors will spend more time assisting
you with your home search if they are confident you’ll be able
to obtain financing once you’ve located a home you’re
interested in purchasing. Second, Seller’s will take your offer
more seriously since they know you will be approved for a mortgage
-- and they won’t risk taking their home off the market only
to find out the deal is going to fall through 30 days later. Finally,
since you know you’ve been approved and much of the paperwork
has already been processed, you’re in for a much less stressful
experience.
Why is it important
to do this as early as possible?
Many loan officers report
that over 50% of the credit reports they see have inaccurate information
listed. This inaccurate information could be the difference between
you getting a loan or not getting a loan - getting a rate of 5%
or getting a rate of 7.0%. The earlier these errors are found, the
sooner they can be corrected.
So, what do you need
for the Pre-Approval Process?
Here a list of documents
your Mortgage Lender will want to initially see copies of:
*W2's from the last
2 years
*Tax Returns from the last 2 years
*Pay stubs from the last 30 days
*Bank & Brokerage Statements from the last 3 months
Additional documentation
will be required depending on your specific situation and as the
process progresses.
Your Mortgage Lender
will go through a loan application with you, which covers questions
related to your current residence, employment status, marital status,
etc. There will be a series of disclosures you'll have to sign as
well - some required by the State or Federal Government informing
you of your rights in the process.
With the application
and disclosures signed, the supporting documentation you provided,
and an understanding of what you are hoping to accomplish, the Mortgage
Lender is ready to submit your "loan" through what's called
"Automated Underwriting". Within minutes, unless your
situation requires an underwriter to personally review your file,
you will have an answer to your loan application.
Now that you have an
approval, your Mortgage Lender will issue a Pre-Approval letter
outlining the terms of your approval. Your Realtor will request
a copy of this letter (typically before they begin showing you homes)
and will include a copy with any offer
you make on a property.
Now it’s time for
the fun part – looking for homes!
About the Author
Chris Rocks is a successful
Mortgage Consultant and writer based out of Chicago, IL. Website
URL: http://www.loansbyrocks.com
Contact Email Address: chris@loansbyrocks.com
The Equity Loans website
is an information site devoted to helping people make the right
decision in regards to taking out equity loans. Equity loans are
not right for everyone so it is best for everyone individually to
weigh the pluses and minuses in regards to equity loans regarding
each and every individual situation.
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