Steps to Getting Pre-Approved
If you are like many folks, the step to get pre-approved to purchase a home can be a daunting task. It can be very emotional as you’re about to leave a place you have called home. The stress starts to kick in as you must gather your income, asset documents and get yourself ready for a conversation about your financial situation with someone you do not know. They are going to ask to run your credit report and will review all the financial decisions you have made both good and potentially bad. Geez, as I write this it makes sense why clients will put this off to the last minute.
One of the key people you will meet can make this experience a good, painful, or a bad one is the loan officer you select. So do your homework on this part. Ask for referrals from people you trust, or Google them to look for client reviews and experience. Did you know you can look up job history on the loan offer? Click on this link. Just put in the loan officer name or NMLS number. Finally, interview the loan officer and make sure it is a good fit.
Once you have made the decision it is now time to prepare for the phone, online or in person application for the pre-approval. Start to think about the purchase price range you are going to be looking at, estimated property taxes, and if any homeowner’s association fees will apply to the properties you like. Make sure to provide them with a budget you are looking to stay under for your new mortgage payment. This will give the loan officer an idea to start building the programs you qualify for with what your goals are. You will also want to know your income structure and asset balances.
The next step will be to provide the loan officer with the documentation to support your conversation. This will vary by client but some of the common items you should supply would be 2 years w2’s, 30 days pay stubs, 2 months bank statements, 2 months or most recent quarterly statement on 401k or IRA account. If you are on fixed income, they will need a social security award letter and a pension award letter. If you own your own business or have rental properties, they will need your last 2 years federal tax returns and if applicable, 2 years business returns.
You should at this point receive a pre-approval from the loan officer. They should have reviewed your credit, income, and assets along with it run through the automated underwriting engine known as DU (desktop underwriter) or LP (loan prospector). With this pre-approval letter you can provide it to your realtor and when you make an offer on a home it will accompany your offer to the seller.
I hope this helps lay out the process to get pre-approved and if you are looking in IL, FL or WI I would love to be your lender of choice. You can reach out to me 7 days a week.
Bryan Reed
American Portfolio Mortgage
NMLS #220817
bryanreed@goapmc.com
www.bryanreed.goapmc.com
847-477-8738