March 02, 2022 at 1:38pm | Lisa Crumby
So you've decided to purchase a home - how exciting! It's definitely a great time to buy with interest rates as low as they are. However, it can be a little difficult to shop for a home without knowing how much you can afford, so talking with a lender about getting pre-approved is one of the first steps you will take in accomplishing your real estate goals.

To get pre-approved a lender will take a look at your income, employment history, and credit score to assess your borrowing power. When mortgage shopping, keep in mind that 'pre-qualification' is not the same as 'pre-approval'.

A pre-qualification is not as strong as a pre-approval, and when you submit an offer to purchase, a seller will prefer a pre-approval letter over a pre-qualification letter. A pre-qualification is basically an estimate as to how much you can borrow, yet no formal documentation has been submitted.
A pre-approval is more in depth. When you get pre-approved, your lender will ask you to provide various documents as well as obtain a credit report to determine your credit score and overall purchasing power.  When you talk with a lender about getting pre-approved for a home, you will more than likely fill out a mortgage application.

Here are a few things that a lender will do to begin the pre-approval process:
  • Ask for Proof of income
  • Verify Employment
  • Pull a copy of your credit report
  • Review Proof of assets
  • Review your debt-to-income ratio
Your lender will also ask you for the following documentation:
  • W-2 statements
  • Social Security number
  • Pay stubs
  • Bank statements
  • Tax returns
Remember that a pre-approval is the first step towards purchasing a home. Once pre-approved, your pre-approval is typically valid for 2-3 months. If you it takes you longer to find that perfect home, you may need to talk to your lender about updating your pre=approval.

Feel free to Contact Us if you have questions regarding the pre-approval process - we are always happy to help! 


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