How to get pre-approved for a mortgage
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Becoming a homeowner is a lifelong goal for many Americans. With all-new experiences comes uncertainty. Realtors, house hunting, bidding wars, and of course, qualifying for a new mortgage is nerve-wracking.
Getting mortgage pre-approval is one of the best choices you can make to simplify the process. It determines how much you can borrow within the allowable guidelines. Prove your seriousness as a buyer and stay one step ahead with a pre-approved mortgage.
Mortgage pre-approved process
Here are the documents you will need to get pre-approved for a mortgage are:
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- Government-issued ID
- Social security number
- Full contact information/complete mortgage application
- Proof of income
- Asset documentation
- Supplementary information will be required to confirm the source of your funds if your down payment is a gift from a third party.
Pre-approval mortgage calculator
Half of your house-hunting process is obtaining financing. You must know how much you can borrow and what your monthly payments will look like.
Most people seriously underestimate the actual cost of owning a home with insurance, property taxes, household expenses and more. With a mortgage calculator, you can get an estimate for the monthly payment. By simply inputting the term of the loan in months, interest rate and loan amount, you can determine what the payment will be. Once that number is determined, you will need to estimate the amount for taxes, insurance and mortgage insurance for the total payment. It is usually best to contact a local mortgage broker to obtain those estimates.
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Trusted. Experienced. Secure.What documents do I need for mortgage pre-approval?
Armed with a mortgage pre-approval, a potential home buyer can confidently approach a real estate agent as a qualified prospect and close the deal quickly. Several documents are necessary to prove your financial ability and reach a positive outcome.
Typically, 30 days of paystubs and the last two years W2’s will be required but sometimes income can be verified online and those documents may not be necessary. In situations that income varies, other documents may be required.
For the self-employed, you’ll need Federal tax returns for two years and sometimes a Profit and Loss Statement reflecting year to date income. Any part time jobs or secondary income such as rental income, child support, or retirement benefits also need to be declared and documented.
When a pre-approval is granted, the borrower will receive a written confirmation stating the borrowing amount given and the approximate interest rate. Pre-approval letters may be subject to a variety of underwriting conditions.
How long does a mortgage pre-approval take?
The pre-approval process can vary from one person to another. The process can take as little as an hour or as long as a few days. When an income stream is straightforward and your credit score isn’t blemished, you’ll likely be approved quickly.
Self-employment or diverse income streams complicates things. It may take longer for the lender to render his decision. Whether your credit score is less than exemplary or you’re financially well off, you’ll soon find out if you’re pre-approved and for how much.
A pre-approval usually takes 1 to 2 business days, depending on the borrower’s situation and the speed at which documents are supplied to the lender. Some lenders may only require your credit score, while others may want to review a complete application and additional documents. When you start thinking about homeownership, the pre-approval process is always the best first step.
How much does it cost to get pre-approved for a mortgage?
Pre-approvals are free. Mortgage lenders generally provide a no-cost assessment to determine whether a borrower meets the primary lending conditions.
When you find the right home for your family, your lender will need to qualify you for a mortgage, so getting started early will save time and last-minute hassles.
Contact the Cain mortgage Team to get you pre-approvals started in the right direction.
Contact the Cain mortgage Team to get you pre-approvals started in the right direction.
