What do you need to bring to the table.
We don't want to sound like a broken record but, you need to have an idea how much home can you afford. We want you to fee comfortable on the amount you'll be paying. After applying for your home there's a lot of paperwork you'll need to have ready to submit in order for us to take that next step... congratulating you and giving you a pre-approval letter. Here are some of the documents you'll need to have ready.
- Paystubs (2-3 to show you have stable income)
- Proof of Employment can come in ways such as W2s, 1099, etc
- Bank Statements
- Business Documents (if you are self employed)
- Proof of Additional Income
- Earnest Money Source (a deposit made to a seller that represents a buyer's good faith to buy a home).
- Stock, Bonds and Saving Statements (Can be considered to show your ability to purchase a home).
What does a Pre-Approval Letter mean?
Once you have gone through the process of an application, credit check and go over your mortgage options you receive a pre-approval letter. Having a preapproval letter shows the seller that you mean business and you are a serious buyer. It can give you an edge over other home shoppers who haven't taken this big step in their process.
Your pre-approval letter will list your mortgage amount, interest rate and additional details of the loan you are looking for. The letter is crucial for your real estate agent to understand your budget and have you one step closer to your dream home.
Does the clock start ticking when you receive your letter? Yes, depending on your lender the pre-approval is valid in most cases 60 to 90 days.
Is it okay to have multiple pre-approval letters?
Some people think the more the merrier, but, not in this case. Having multiple letters can be harmful to your credit score. Keep in mind that each lender will run a credit check to make a letter for you. Running or pulling your credit creates a hard inquiry on your credit report and too many inquiries can be a red flag to future lenders.
When is it okay to apply for a mortgage pre-approval letter?
Typically, borrowers should wait until they are ready to actively search for a home before they get pre-approved. This will guarantee that their pre-approval letter doesn't lapse and they can unquestionable place on offer towards their future home.
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