Are you jumping into the world of homeownership?
Are you a fan of HGTV’s House Hunters? Looking at all of those different houses seems like so much fun!
Well, beyond the fun of looking for the perfect home, there is the practical side: the mortgage.
Pre-approval? Mortgage pre-qualification? Is it all necessary? Does it make things easier for the whole home-buying process?
Are you hoping to get pre-approved for a mortgage to kick-start your home hunting journey? If so, read this mortgage pre-approval guide to learn how it’s done.
Getting a Mortgage Pre-Approval
Getting a mortgage pre-approval is the best way to impress a seller. Your offer will be backed up by a pre-approval and will show the seller that you’re ahead of the game when it comes to getting a mortgage.
What Should You Do First?
When you’re ready to take on the responsibility of owning a home, you need to make sure your credit report is stellar.
Take the time to check your credit score and report. If there are any errors or problems, take care of them before applying for a pre-approved home loan.
Because a pre-approval letter shows confidence from a lender that you have the means to make a down payment and that your income supports payments on a home loan, it shows that you’re a serious potential buyer.
Sellers like that. They don’t want to waste time with people who may not be able to secure a loan.
Your pre-approval letter also shows what amount of money a lender is willing to loan you and the maximum amount that you can afford to spend on a home.
What Do You Need to Provide to the Lender?
When seeking a pre-approval, you’re expected to provide the lender with some documentation.
- Personal information
- Income verification
They’ll need a copy of your driver’s license, your social security number for the credit report, pay stubs from the last month (or longer), and W-2s and tax returns from the previous two years.
If you have other assets like bank accounts, investment accounts or a monetary gift, you’re expected to disclose that information as well.
Once all the information is provided to the mortgage institution, it goes to the underwriter.
The underwriter evaluates all of your documentation to see what kind of risk you are in regards to a mortgage. The underwriter’s decision is one of the following:
- Approval with certain conditions
- Suspended, requiring more information
If you’re denied, you can seek a second opinion if you have a good reason to back up your request. Once approved and informed of the types of loans for which you qualify, you may begin house hunting with confidence.
Are You Ready to Begin the Pre-Approval Process?
You’re excited to be buying your own home! Make the process as smooth as possible by knowing what’s ahead of you.
Gather your documentation, clean up your credit and find a lender that will work with you to get you the home of your dreams. Visit us to get started on your mortgage pre-approval in Indiana.