When your realtor asks your the million dollar question, ” are you pre-approved with a lender yet”, what will be your response? Make sure you are prepared. The mortgage preapproval letter is like gold because it means that a lender has committed to issue you mortgage loan for a specified amount based on their application approval process. When obtaining your pre approval make sure you have certain documents available.
When applying for a mortgage you will need to provided documents showing all borrowers income. These documents will be at least 2 years tax returns (will vary from lender and their programs), 30 days paystubs, 30 days bank statements, last 2 years W-2, just to start. More documents may be required by the lender if the first set of income documents needs clarification.
All home buyers, whose names are listed on the application will be required to provide their social security number in order for the lender to pull their credit report. On the application, you will have to state all financial obligations, such as credit card bill payments, car payments, child support payments, etc. These items must match your credit report. Please be sure to check your own credit before shopping for a lender, to ensure your report reflects all accurate information.
Once your mortgage lender has reviewed all documentation and it satisfies their guidelines, a preapproval letter will then be issued. Keep in mind if your circumstances change for the worst, the letter can be rescinded, so it is not binding, nor are you obligated to go with the lender that provided you with the letter. Be sure to give a copy of the letter to your realtor and happy house hunting.