It is a written commitment from the lender (The Mortgage Firm) stating that the borrower (you) qualify for a particular loan amount based on your credit information and income.
Why?
There are many reasons to get pre-approved. The most important reason for accurate idea of how much you can afford. This will ensure that you only look at houses that are truly in your price range. A pre-approval letter is essential in a competitive real estate market. If you make an offer on a house without a pre-approval the seller will not take your offer as seriously as someone who has been pre-approved. This means you could lose out on your dream house.
**Most bank owned homes will require a pre-approval letter
from the lender before accepting the offer**
from the lender before accepting the offer**
How do you get pre-approved?
First contact your lender (me)
- W2 from the past two years
- Your pay stubs for the past 2 months
- Your tax returns for the past 2 years
- Your checking and savings account statements for the past two months
- Your statements for all other assets for the last two month
- Current mortgage statement or contact information for current landlord
- If you are self-employed: you will also nee your business tax returns for the past two years as well as your year-to-date profit and loss statement with a balance sheet
- As your lender I will also need to pull a current credit report for you and the co-borrower.
- If you are divorces, separated, or paying child support or alimony- documentation will be needed
We will analyze your credit report for any red flags, the credit score will affect your ability to qualify for a loan, as well as the rate your can get. A score above 720 will get the most favorable rates.
What happens if you are denied?
This just means that you have some work to do. Three most common ways:
- Correct the errors that may have been discovered in your credit report
- Decrease the debt and improve your debt to income ratio
- Increase your down payment amount in order to qualify for the price of the home you want
What NOT to do after you have been pre-approved
- Do Not apply for a new credit card
- Do Not make any major purchases
- Do Not pay off all debt
- Do Not co-sign any loans
- Do Not change jobs
- Do Not ignore your lenders requests
- DO keep a paper trail of all deposits
- DO stay current on existing accounts
- Do Discuss seller
For more information specific to your situation is available, just a phone call away!
No comments:
Post a Comment