fbpx

Mortgage Pre-Approval: The Big Advantage When Buying A Home

pexels-photo-1246954

First thing you are probably wondering is what does a mortgage pre-approval mean? It means a lender has guaranteed to give you a home loan and getting pre-approved for a mortgage before you make an offer can give you a huge advantage when you’re competing with all the other home buyers in a competitive housing market.

How to get pre-approved for a mortgage: The paperwork

Prepare yourself for the load of paperwork you will need to provide to earn your mortgage pre-approval. Altogether, you will need to assemble the following paperwork for your lender:

  • Pay Stubs from the last 30 days showing year-to-date income
  • 2 Years federal tax returns
  • 2 Years of W2 forms from your employer
  • 60 Days or a quarterly statement of all your asset accounts, which include checking and savings, as well as any investment accounts such as CDs, IRAs, and other stocks or bonds
  • Any current real estate holdings
  • Residential history for the past 2 years including landlord contact information if you rented

The Difference Between Pre-Approval and Pre-Qualification

Pre-approval and mortgage pre-qualification should not be confused. Pre-qualification is based solely on verbal information about your income and savings that you tell a lender. It shows how much you could theoretically borrow but it isn’t a guarantee. This means buyers will have to officially get approved for a loan later on and hope for good luck. Pre-approval, on the flip side, means the lender is willing to loan you the money. Then you’ll have an official letter from the lender stating so and that will go miles with a seller.

How Pre-Approval Helps Buy A Home

When a seller accepts an offer, they want nothing more than the deal to go through. However, if the buyer isn’t pre-approved for a loan, this can put the entire deal out on a limb, because if the loan does not get approved, the buyer will likely be unable to follow through.

A pre-approval ensures that extra measure of security to a seller that you are both willing and able to buy the house. As a result, sellers will likely pick you as a buyer over another buyer without pre-approval since you are a sure thing and they won’t have to worry that the deal might not go through. So, even though pre-approval is a pain in the rear, you’ll have to saddle up all that paperwork eventually. You might as well do it right out of the gate, get a jump on the competition and shop for the home of your dreams with ease!

Need free expert help with this process?

Contact me anytime and let’s talk real estate!

Need Help Buying Or Selling Your Home?

Don’t worry anymore! Call or text me anytime at + 1(480) 295-2619 or fill out the form below to email me and I look forward to helping you reach your goals!

Share this post with your friends

Leave a Reply

Your email address will not be published. Required fields are marked *