Looking to purchase a home, but not sure how to get pre-approved for a mortgage? You’re in the right place. Home Town Builders will discuss the process, and help you learn what you need in order to be pre-approved for a home loan.
- Collect All Your Financial Paperwork
In order to pre-approve you for a loan, a bank or credit union will generally need a comprehensive, holistic view of your finances. Every bank is somewhat different, but common things you’ll need to bring in include:
- Pay stubs
- Bank statements and income statements
- Proof of income and employment
- Tax information
- Information about assets in retirement/brokerage accounts
- Employment history
- Asset information (cars, other properties, etc.)
- Personal information (passport, birth certificate, driver’s license, social security card)
- Make Sure You Have A Good Credit Score
Your credit history is very important when determining how much you’re eligible to borrow. Because of this, you should have a pretty good credit score when applying for loan pre-approval.
You’ll get the best rates if you have a score of over 700, but you can often get pre-approved for smaller loans with a score of under 650. You can improve your credit score by paying down your credit card bills, making timely payments, and ensuring that you do not miss any bills.
If your credit score is still relatively low, it may be worth waiting until you can improve it, so that you can secure a lower mortgage interest rate.
- Gather Money For A Down Payment
Your lender will usually check to see if you have enough cash assets for a 10-20% down payment on your home. You may also need to prove that you have cash reserves – enough money to continue making payments even if you lose your income source – for some high-value loans.
Get Pre-Approved – And Get The Home Of Your Dreams!
Loan pre-approval is useful when shopping for a home, because it signals to real estate agents and home sellers that you’re already qualified to buy their home, and are ready to commit to a purchase. So get pre-approved and start shopping for your new home today! For more information, call us today at (407) 604-1414.