One of the first steps to buying a home is making sure you are Pre-Approved for a mortgage by a lender. This process is extremely important and a home seller, as well as your real estate agent, will want to verify that you are an approved buyer. Upon becoming Pre-Approved by a lender, they should provide you with a professional Pre-Approval letter.

Some home buyers get mixed up by references of Pre-Qualification versus Pre-Approval – these are very different. Getting Pre-Qualified is verbal and may only entail you speaking with a lender and verbally telling them your details such as credit score, income, and savings. A Pre-Qualification is just an estimate and has little verification involved. A Pre-Approval is a full submission and review of personal details that allow for a lender to be far more accurate and complete a true review of your borrowing ability. Only after an in-depth Pre-Approval process should a Pre-Approval letter be provided.

A great Pre-Approval letter can be the difference between an offer on your dream home being accepted or denied by a seller. A seller’s goal is to verify that a buyer is able to purchase their home and also serious about doing so. A great letter will include things such as estimated loan amount, down payment, loan program, property type, verification of credit review, verification of personal documentation, and some information about the lender. If you are submitting an offer, the letter may also have the address of the property you are submitting an offer on.

So, you may be wondering where the best place is to get Pre-Approved for your home purchase and where to receive a great Pre-Approval letter? We wrote a whole blog on this as well so you can learn How to Choose a Great Mortgage Company. There are a lot of different types of companies who do mortgages, so this article goes over the differences between banks, mortgage companies, and mortgage brokers. As you look at the different options for who to choose for your Pre-Approval, it is important to review expertise, track record, online reviews from past clients, and response or helpfulness when reaching out.

Once you make a decision and decide to move forward with your Pre-Approval process, the next step is to have your personal documentation organized and ready to provide to your lender. Most lenders will accept digital formats of your documentation and this often speeds up the process.

Documentation to gather for a home loan Pre-Approval:

  • Income Documents
    • W2s – latest 2 years worth
    • Personal Tax Returns – latest 2 years worth
    • 1099’s – latest 2 years worth
    • Paystubs – most recent 1 month’s worth
    • If self-employed, other income documentation may be required to prove income.
  • Asset or Savings Documents
    • Bank Statements – latest 2 months of statements
    • Investment Accounts – latest 2 months of statements
    • Retirement Accounts – latest 2 months of statements
  • Property Details
    • Desired purchase price
    • Desired down payment
    • Single Family Home, Townhome, Condo, etc…
    • Personal Residence, Investment, or Second Home (Vacation)
  • Other
    • The lender will need to pull your credit report for you, no need to get this on your own.
    • Other real estate owned is important. Make sure to have any rental details ready, as well as mortgage statements, property tax info, and insurance details.

If you are in need of a home loan Pre-Approval, we would love to help you out. With over 16 years of residential mortgage experience, West Coast Mortgage Group has mastered the art of helping clients successfully navigate the home purchase process. We are here to answer any questions you may have and our team is here to assist you with your home purchase, mortgage refinance, or mortgage planning needs.

Our clients understand the value of a proper Pre-Approval and it is often the deciding factor for their offer getting accepted. We believe success starts with planning which is why we take the Pre-Approval process seriously. In the end, our clients experience a smoother transaction and less stress as a result. Call us at any time for a free live consultation or schedule a meeting today!