Every borrower should get pre-approved before they go shopping for a home.  Let both your borrowers and agents know the difference between a pre-approval and pre-qual from those online sites.

You may be wondering what it is like to buy a home.  Should you start your search online?  Should you look at homes first or get approved first?  Wherever you are in your new home search, one of the most important things you will need is a pre-approval letter from your lender.

So, what’s a pre-approval letter?

A pre-approval letter is a written letter from a mortgage lender that states that you have been tentatively approved for a mortgage. Your pre-approval letter includes the specific amount you are approved for as well as your interest rate and loan term.  The letter will include the amount of money that you have been approved for and it is what sellers are looking for to make sure that if they accept your offer, you will actually be able to get financing for the house you are buying.

If you are looking for a home, it’s important to know how much you can afford, and sellers feel more comfortable knowing that you have already been approved.

How can you get a pre-approval letter?

To get pre-approved you must first meet with a mortgage lender, like me.  You will need to complete the following steps to get a pre-approval letter:

Step One: Complete a home loan application

You can often complete the application online or over the phone.  After the application is complete, we will pull a three-bureau credit report that will show your credit score and credit history.

Step Two: Document your income and assets

The next step is to send in your supporting documentation that will help determine what you qualify for.  This documentation will usually include:

• Last two year’s W-2s and/or 1099s
• Last two year’s tax returns
• Paycheck stubs for last 30 days
• Bank accounts, retirement accounts and other asset information
• Proof of down payment funds
• Recent residential history

To speed up the pre-approval process, it helps to have these documents ready to go before you get started.

Step Three: Underwriting

The last step in the pre-approval process is underwriting and it is what will happen once you have completed your mortgage application and sent in your paperwork.  Your lender should be able to get you your pre-approval letter within a 24 to 48-hour period so you can start looking at homes.

Most sellers today are asking for pre-approval letters, but some are allowing what is called a pre-qualification letter.  A prequalification letter is usually easier and faster to get because it does not involve submitting your paperwork or verifying proof of funds or income.  But don’t think that just because you’ve filled out a mortgage application on some online website that you actually have a pre-approval letter because you don’t, and sellers agents know the difference.  Spend the extra time to actually get a pre-approval letter from a mortgage lender, like me.  It will not only help you get in to see a home that you are interested in but could also be what helps your offer get accepted quicker when you are ready to buy that home of your dreams!

Now could be the perfect time for you to buy a home and knowing what you need, like a pre-approval letter, can help you breeze through the process.

 

Michael Anthony O’ Connor

President

Certified Veterans Lending Specialist

NMLS# 254139

CA BRE: 01149902

(833) 444- 3464

www.michaelanthonyoconnor.com

Mike@Got-Funding.com