After you've gotten yourself prepared and feel ready to move forward with your home purchase, the next step is to get pre-approved with your mortgage lender. A pre-approval is based on your financial situation and includes a loan amount agreed upon between you and your lender that they believe you will be able to repay.
A pre-approval letter is not necessarily a commitment to the loan, but it is a huge asset to have when you are searching for your home, as it shows any realtor and/or seller you are working with that you are serious about this purchase and ready to qualify. This gives you an advantage over other buyers who have not pre-approved through a bank yet. Also, many realtors will not work with clients until they have obtained a pre-approval.
In order to get pre-approved, all applicants for the mortgage will need to do the following:
- Have your credit run
- Show your last 2 years tax returns
- Show your last 2 years W2
- Show one month of paystubs
- Show 2 months worth of bank statements
Once you submit these documents to your lender, they will provide you with your pre-approval for an amount you ask for, as long as you can qualify for that amount.
A pre-approved buyer is the best kind of buyer. Give yourself an advantage over other buyers in the market by getting pre-approved and ensure you get the home you want.