Westvalley Dream Homes

The Home Buying Process:

5 Things You Need For a Mortgage Pre-Approval

While it’s enticing to look at homes and may even be anecessary ingredient in initiating action on buying a home, the home buying processshould actually start in a lenders office.

With a pre-approval in hand realtors and home sellers alikeare much more willing to work and negotiate with you.

Two types of approvals exist in the pre-mortgageprocess. Pre-qualification versus pre-approvalboth provide benefits to the home buyer in the initial stages of the process,but only the pre-approval is a valuable tool for the realtor and home seller. Thepre-approval lets them know that you are a serious buyer and will qualify forthe home you may decide to purchase. Thepre-qualification is an estimate on how much you can afford to spend on a newhome.

In order to obtain a pre-approval you should be prepared toprovide the following:

1. Proof ofincome: 2 years of pay stubs and 2 years of tax returns.

2. Proof ofAssets:Bank statements and/or investmentaccount statements to prove that you have money for the down payment of as lowas 3.5 % for an FHA loan or in the case of conventional loans which require 10to 20% depending on the program. Any money from a friend or relative mustaccompany a gift letter stating that the money is not a loan.

3. Goodcredit: Most lenders require a credit score of 620 or higher to approve anFHA loan. Those with a score below 580are usually required to make a larger down payment

4. Employmentverification: The lender may want to call your current employer and if yourecently changed jobs they may also want to call your previous employer. Theywant to see stable employment history. Be prepared with numbers, names andaddresses of these individuals including dates of employment

5. Documentation:Social security card, driver’s license and your signature will be required tohave on hand so they can make a copy of them for your file and pull your creditreport.

Being prepared and visiting alender before you begin the home search process can make the whole experiencenot only much smoother but much less stressful overall. Knowing what you can borrow upfront gives youthe information yo