Financing Your Home
Why Get Pre-approved For a Mortgage Before You Buy?
- The seller will know you have already been to a lender and are qualified to buy their home.
- If the seller would receive two offers the buyer who has been pre-approved has a definite advantage, and the seller is more likely to accept that offer even through it may be less than the other offer.
- The buyer knows what price home he/she can afford and what monthly payments he/she is comfortable paying.
- The buyer will be able to close sooner because some of the necessary paperwork is already completed by the lender.
Information Needed at the Time of Your Application
- Social Security number of all applicants
- Residence addresses for the past 2 years (include landlord's address)
- Names and addresses of each employer in the past 2 years
- Recent pay stubs and previous 2 years' W-2 statements
- Names, addresses, account #'s balances and monthly payments for all open loans (include statements if available)
- Schedule of real estate owned (include lender, loan amount, balance and account #'s)
- Money for credit report and appraisal
- If self-employed, see loan officer for requirements
- Certificate of Eligibility and DD214 (VA only)
- Statement of service (active duty only)
- Picture I.D. (FHA & VA)
Pre-approval vs. Pre-qualification
Pre-approval is more formal than pre-qualification and it takes longer: To get pre-approved you provide that same paperwork you will be asked for when you make a formal loan application. This will probably include your credit history, employment, and down payment funds, all of which will be verified.
Pre-approval guarantees your loan, but it is not a mortgage contract. You can't get the mortgage until the lender can appraise the property and do a title search. (These steps happen after your offer to buy a house is accepted.) When you formally apply for a mortgage, certain facts may have to be reverified. This depends on how much time has passed since the pre-approval.