How to Get Pre-Approved for a Mortgage: A Step-by-Step Guide
How do I get pre-approved for a mortgage?
Getting pre-approved for a mortgage is an important step in the homebuying process. It can help you determine how much you can afford to spend on a home, and it shows sellers that you are a serious buyer. Here's a step-by-step guide on how to get pre-approved for a mortgage.
Click the photo to find beautiful homes near you, and to receive personal assistance from Sam.
Step 1: Ask for Recommendations
A local real estate expert (like Sam) works with lenders on a daily basis. They will have recommendations and personal relationships with some of the best lenders in your area. Oftentimes, the local lender that you want won’t have a strong presence on search results for terms like “best lender in my city” because the major corporations (Rocket Mortgage, Loan Depot, etc.) will have thrown massive advertising budgets at your search terms. They’ll match you with someone over the phone who, while licensed in your state, may or may not actually live there. Even if they do, there’s no guarantee that you’ll be matched with a consummate professional: Your luck may vary.
Luckily, a phone call to a local realtor is quick, free, and easy! Because they work with lenders, title companies, builders, and many other professionals in your local market day-in and day-out, they will be your best resource for sorting the champs from the chumps.
Step 2: Gather Financial Documents
To get pre-approved for a mortgage, you'll need to provide documentation of your income, assets, and debts. Gather documents such as W-2 forms, bank statements, and tax returns for the past two years.
Step 3: Contact Lenders
Using the list of recommendations from your realtor, as well as any personal recommendations or lenders that you’ve found online, reach out and have a conversation with several lenders. Get a feel for their personality, level of customer service, experience level, and qualifications. Take notes, and ask them about next steps.
Step 4: Submit a Pre-Approval Application
Submit a pre-approval application to the lenders on your short list. This application will require information about your income, assets, debts, and employment history. The lender will also pull your credit report and use this information to determine whether to pre-approve you for a mortgage. You’ll find that most lenders use similar online portals for this application process, and it will be helpful to have all required documents in one digital folder for easy upload.
Step 5: Provide Additional Documentation
After submitting your pre-approval application, your lender may request additional documentation to verify your financial information. Be prepared to provide this documentation promptly to avoid delays in the pre-approval process.
Step 6: Receive a Pre-Approval Letter
If your lender approves your pre-approval application, they will provide you with a pre-approval letter. This letter will state the amount you are pre-approved to borrow and a tentative estimate of the interest rate and terms of the mortgage.
Final Thoughts
Getting pre-approved for a mortgage can help you determine your budget and show sellers that you are a serious buyer. By following these steps and working with a reputable lender, you can increase your chances of getting pre-approved for a mortgage that meets your needs. If you’re unsure where to begin, give Sam a call and he’ll point you in the right direction!
