What Do You Need for Mortgage Loan Preapproval?

Several documents are required for mortgage loan preapproval.

To get a mortgage loan preapproval, a borrower needs to contact a mortgage loan officer and fill out an application. The borrower will have to provide certain documents to qualify for preapproval.

Significance

A mortgage preapproval will show a borrower the amount she can qualify for, as well as prove to a lender that her loan is a viable option.

Function

The required documents show the lender the assets and liabilities of a borrower, helping him to make a good decision on the borrower's ability to repay the debt.

Types

Documentation may include bank statements, pay stubs, tax returns, credit reports and a Social Security number.

Considerations

Your preapproval is only as good as the information you give to your lender. For example, if the lender is unaware of a debt during the preapproval process but finds out about it later on, your application for a mortgage may be denied.

Misconceptions

A mortgage preapproval does not mean that the mortgage will definitely close. Several factors could come into play before closing, including a change in mortgage regulations or a change in your financial situation.

References

• Federal Reserve: Understanding the Home Mortgage Process
• Mortgage 101: Mortgage Pre-Qualification vs Pre-Approval