Vow Page

Get The Pre-Approval Ball Rolling

The more organized you are, the easier you’ll go through the pre-approval and mortgage application process.

Here’s a list of items to pull together:

1. W-2 (2 years and most recent pay stub)
2. 12 months’ statements or cancelled checks for present mortgage or rent payments
3. Names and addresses of all employers during the last 2 years
4. Latest 3 months bank statements for all accounts
5. Account numbers and outstanding balances on credit cards and existing loans
6. Social Security number
7. If self employed: last two years’ tax returns

Pre-Approval Letter
Here are five reasons WHY!

Most home buyers know they should get a mortgage pre-approval letter from a lender before they begin seriously shopping for a home.  

Here is some of the reasoning behind this:

1. A pre-approval letter is reliable indication of your buying power. It is submitted with your offer to prove to the seller that you can buy their house. The lender will ask for documentation to confirm your employment, the source of your down payment, and other aspects of your financial circumstances. 

2. You'll know how much money you can qualify to borrow. Most home buyers have a rough idea of how much they would feel comfortable paying every month. However, there's no quick way to translate that monthly payment into a specific maximum mortgage amount because other factors -- down payment percentage, mortgage insurance, property taxes, adjustable interest rates, plus income, debts, and your credit history determine the outcome. 

3. You submit your pre-approval letter with your offer.  Sellers prefer to negotiate with pre-approved buyers because the sellers know you are financially qualified to obtain the financing they need to close the transaction. They need confidence to take their house off the market for you. 

4. Your real estate agent will work harder on your behalf. A pre-approval letter signals to your real estate agent that you're a well-qualified buyer who is serious about purchasing a home. In fact, some agents won't even show property to buyers who don't have a pre-approval letter.

5. A few caveats: Pre-approval letters aren't binding on the lender, are typically subject to an appraisal of the home you want to purchase,  and are time-sensitive. If your financial situation changes (ie: lose your job, lease a car, run up credit-card bills), interest rates rise, or a specified expiration date passes, the lender will review your situation and recalculate your maximum mortgage amount accordingly.