Steps to Getting a Mortgage Pre-approval

Are you wondering how you can get a mortgage pre-approval? No doubt, getting pre-approved gets you much closer to purchasing a home. It makes your offer more appealing to sellers and gets one of the required steps out of the way up front. A mortgage pre-approval lets you know what you can qualify for when searching for a home to buy.

But what are the steps you need to take to make it happen? Here’s what you can do.

4 Simple Steps to Get Home Financing Pre-approval

Gather the Required Documentation

To get pre-approval for home financing, you must supply documentation with evidence of assets, income, and debts. These typically include:

• Bank statements
• Pay stubs 
• W-2 statements
•  A valid ID, such as a passport for confirmation of citizenship
• Federal tax returns
• Loan statements, including student and other loan obligations
• Court records in case of a marital dispute or a recent divorce

If you run a private business or are self-employed, the lender may require details of your business accounts and records, such as the P & L statements. 

Credit Check

Your lender will require you to consent to a credit check. You can apply for a copy of your credit report free of cost by visiting AnnualCreditReport.com.

A credit check looks at the credit utilization compared to the total credit limit. Most lenders require a minimum credit score of 620 for conventional mortgages and a bit higher for federal housing loans. A better credit score can win lower interest rates and more options. 

Pre-qualify with Lenders

Pre-qualifying with lenders involves getting quotes and estimating how big a loan you might be able to get. Shop around and choose a lender with minimum interest rates and additional charges. The interest rate you are offered is primarily determined by your credit score and debt to income ratio. Lenders offer different rates to equally qualified applicants, so shopping around is a good idea.

Get Home Financing Pre-approval

After assessing your financial situation and credit score, the lender determines whether you are pre-approved for a mortgage or not. The lender will also estimate the amount they may lend you.

If you get approved, you’ll receive a pre-approval letter from the lender, which will be eligible for a certain period (usually 60 to 90 days).

Ready to buy your new home?

So, know it can be done if you want to buy a home. Make sure you have the right people behind you, and the rest will fall into place. And don’t forget to stop along the way and appreciate the journey of buying your first home.

Are you considering buying or selling a home in the Austin area? We’d love to help you! Please click here for our contact page, and we’ll reach out to you promptly. 

Would you like to see more great info from Capital Downtown Realtors? Please click here for our blog page. Please click here for our “Meet the Realtors” page to learn more about my team.

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