Mortgage Pre-Approval...

Get A Mortgage Pre-Approval Letter First!

One of the most important steps in the home buying process is to get a mortgage pre-approval letter or a mortgage pre approval certificate as early as possible.

The pre-approval process involves you speaking with a mortgage lender or a mortgage broker about your financial situation. Let them know what you'd like to accomplish, and any concerns you might have.

With that information, the mortgage lender or mortgage broker can obtain a loan pre-approval from a lender up to a specified loan amount and provide you with the monthly payment information and closing cost information.

There Are Many Benefits To Getting A Mortgage Pre-Approval.

As you prepare to start house hunting, you will know your budget limits and can eliminate the properties out of your price range prior to viewing. (There's nothing more frustrating and disappointing than seeing a house you love...but cannot afford.)

One of the first questions you will be asked by an experienced Realtor is: "Have you been pre-approved for a mortgage?" or... "Do you have a mortgage pre approval letter or pre approval certificate?"

An experienced real estate professional will spend the time and effort required in assisting you with your house hunting if they are confident that the financing can be in place when you finally find your dream home.

When negotiating an offer, the sellers will take your offer more seriously, if they know you have a mortgage pre-approval letter or certificate. Their concern is always the risk of taking their home off the market only to find the contract is going to fall through due to the buyer's inability to get a mortgage. In a hot real estate market, your mortgage pre approval letter is definitely leverage for your Offer to Purchase!

Since you have a pre-approval letter, much of the paperwork has already been processed, so you can enjoy the house hunting experience with a little less stress.

Many lenders, loan officers and mortgage brokers report that over 50% of the credit reports they see have inaccurate information listed. This inaccurateinformation could be the difference between you getting a loan or not getting a loan. Or... getting a mortgage rate of 5% versus getting a mortgage rate of 7.0%. The earlier these errors are found, the sooner they can be corrected.

What Do You Need For The Mortgage Pre-Approval Process?

Here is a list of most of the documents your mortgage lender will want tosee copies of:

• W2's from the last 2 years (T-4's in Canada)
• Tax Returns from the last 2 years
• Pay stubs from the last 30 - 60 - 90 days
• Bank & Brokerage Statements from the last 3 months
• A Letter of Employment

Additional documentation will be required depending on your specific situation and as the process progresses.

The mortgage lender will go through a loan application with you, which covers questions related to your current residence, employment status, marital status, existing debts/loans, credit cards etc.. There will be a series of disclosures you'll have to sign as well - some required by the State or Federal Government informing you of your rights in the process.

With the application and disclosures signed, the supporting documentation you provided, and an understanding of what you are hoping to accomplish, the mortgage lender is ready to submit your loan or mortgage, through what is called "Automated Underwriting". Within minutes, unless your situation requires an underwriter to personally review your file, you will have an answer to your loan application.

Now that you have an approval, your lender will issue a Mortgage Pre-Approval Letter outlining the terms of your approval. your Realtor will request a copy of this letter (usually before they begin showing you homes) and will include a copy with any offer you make on a property.

Now it’s time for the fun part... house hunting!