Getting ready to buy your first home? One of the first things you can do as part of the home-buying process is to get pre-approved. Why? You’ll know how much house you can afford and a pre-approval lets the real estate agents know you have the finances lined up and are ready to go.
The first step in getting pre-approved is to complete our loan application. You’ll need to submit documentation of your financial history, including income, assets, and debts. We’ll ask you to provide at least the following documents:
- W-2 statements
- Bank statements
- Credit report
- Tax returns
- Place of residence
- Self-employment documents
Benefits to getting pre-approved
Wondering if it’s worth it to get your finances in order before you start house shopping? Here’s 5 reasons why you should:
- You’re a more powerful buyer
Real estate agents and sellers will see you as a serious buyer when you have the backing of a lender. Pre-approval means a lender has looked at your financial background and determined how much home you can afford. - Save yourself some time
Getting pre-approved can also save you valuable time by identifying how much you can afford, so you can target your home search to your price level. This also allows you to focus on the features of the home rather than worrying about the price tag. - Better bargaining power
With a pre-approval letter in hand, you will likely have more negotiating power because sellers and real estate agents know that you have already talked to a lender and you mean business. - Reduce surprises
Talking to a loan originator before finding your perfect home can help ensure you’re not surprised when it’s time to make an offer. Getting your ducks in a row early will leave little room for unexpected surprises – such as a low credit score or a less than desirable debt-to-income ratio – when you find the home you’ve been looking for. - Enjoy shorter closing periods
A pre-approval can help to speed up the closing process, since much of your financial information will already be in the lender’s system.
Once you submit your financial information, the lender will review it and let you know if you qualify for a loan. At that point, the lender will provide you with a pre-approval letter outlining the maximum amount you’re qualified to borrow.
