Pre-Approval

Top Reasons to Get Pre-Approved for a Mortgage

You’ll know what you can afford.
Because of increased restrictions on the mortgage industry, what you could borrow five years ago may not be the same as it is today. So, it’s even more important to understand what you qualify for before you begin to shop.

Save yourself time.
Before you start house hunting, it’s important to know what you can actually afford. It’s never fun to fall in love with a home only to realize later it is out of your budget!

You’ll be able to beat out competition.
If you get into a bidding war, knowing how much you can borrow will give you a leg-up on your competition. You’ll be able to be more strategic about your offers and understand what an offer increase could do to your monthly mortgage payment. You’ll also know when it’s time to walk away or (if you can afford to do so) increase your offer amount. You won’t lose time by going back to the bank and risk losing the home, if you know how much you can negotiate.

Get a home quickly.
Having a pre-approval in hand will help you to make purchasing decisions. If you wait until you find a house to get pre-approved, you’ll have to take time out to find a mortgage company and compare products – which could take weeks. During those weeks, you could risk losing your dream home to another buyer.

FAQs: What documents do I need to apply for a mortgage?

Gathering mortgage documents will be easy for type A personalities. But don’t worry if you are not Mr. or Miss Organization, most of the documents you need to apply for a mortgage are easy to obtain or readily available in your filing cabinet. Here’s the run-down of the basic documents that you’ll need to gather:

Full Tax Returns from the last two years are needed to verify the income and how consistent this income has been over the years.

You need pay-stubs for the last 60 days or 1099 forms at your current employment, or records of payment if you are a freelance employee. If you have supplemental income such as part-time job or seasonal employment you will want records of this income as well.

Financial records are needed for all assets such as checking, savings, and investments. Your lender needs to know you have the funds available to make your down payment and know that you can pay for other costs that are associated with closing.

Photo ID for everyone listed on the loan will be required.

Signed sale contract and proof that you have homeowners insurance are needed to make sure you have an accepted offer and insurance to make sure the bank’s investment is protected.

Statement of a gift will be needed if you are receiving a gift in order to pay for closing costs or a down payment. More than likely if someone is generous enough to be gifting you a lump of money they won’t mind writing a letter stating the amount and that it doesn’t need to be repaid.

There might be more or less documents needed for your perticluar lending situation, your mortgage consultant should help guide you through what documents are needed for your unique loan application.