Pre-Approval: Home Mortgage
Why should you get Pre-Approved for a Home Mortgage Loan?
If you are looking for a home, your first home or your fifth, you will need to deal with a mortgage loan unless you are a cash buyer. It is critical that you get pre-approved for the mortgage you need before you start shopping for a home.
The Advantages of Getting a Pre-approved Home Mortgage Loan
One major advantage of getting pre-approved for a home mortgage loan is that it gives you a firm idea of how much you are qualified to borrow. You will not waste countless hours looking at homes, only to find out afterwards that you cannot afford the mortgage.
In addition, Realtors will be willing to spend more time assisting you in your home search if they know you are preapproved for a mortgage loan. Sellers will be more motivated to work with you if they know you are pre-approved for their list price. Pre-approval is help to the realtor, sellers as well as the potential buyer.
STEPS in the pre-approval:
An application is taken by a mortgage professional. The mortgage lender will ask questions in reference to financial history, job history and housing history. Credit will be checked.
The mortgage lender will verify all info supplied by the buyer. The buyer will be asked to bring in the following info:
Depending on the situation, additional info may be required. If relocating from another location, a job offer letter will be required detailing start date and income.
When the documents are brought in, the lender will also require that a number of disclosures are signed by the potential buyer.
After the mortgage loan application is reviewed and signed, the mortgage lender will submit the info through the “automated underwriting” system. The automated underwriting system typically will provide an answer within minutes of submission and will determine the terms of the mortgage approval and the amount that a borrower can qualify for.