Getting Pre-approved for a Mortgage
PRE-QUALIFICATION VS PRE-APPROVAL
A lender can pre-qualify you to buy a house after a quick conversation about your income, assets, and down payment. Unfortunately, a prequalification has no value to sellers and little value to you. Getting pre-approved for a mortgage is completely different, a lender will need to verify your financial information and submit your loan for preliminary underwriting. That extra effort will pay off when you begin your home search. A pre-approval letter saves you time, stress, and heartache. It shows sellers you are serious. It is the gold seal of excellence on your offer.
WHAT YOU WILL NEED TO PREPARE:
Identification
- Driver’s license or U.S. passport
- Social Security card or number
- A copy of the front and back of your permanent resident card (if you aren’t a U.S. citizen)
- Credit history
- Employment verification (employment letter and yearly salary)
Income
- Pay stubs covering the last 30 days
- W-2 forms from the last two years
- Proof of any additional income
- Federal income tax returns (personal and business) with all pages and schedules from the last two years
Assets
- Bank statements proving you have enough money to cover the down payment and closing costs
- A gift letter saying your down payment is a gift, if you are receiving one
- An approval certificate if you are receiving a bond or grant
- Latest quarterly statements for asset accounts including your 401(k), IRA, stock accounts, and mutual funds
Important to note: Getting pre-approved for a mortgage sets you up for success, but it does not commit you to a lender. There are many types of lenders to choose from. You have the right to shop around, and should.