How to Apply for a Mortgage Loan Preapproval
To make your home-buying process go more smoothly, get preapproved for a mortgage before you even start looking for a home. When getting preapproved, a mortgage lender reviews your finances and credit history and then gives you a preapproval letter. The letter states how large of a mortgage you can obtain. This lets you know how much house you can afford, which can help narrow your home search.
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Things You'll Need
- Pay stubs and W2s to verify two years of income
- Two or three months of bank statements
- If you are self-employed, you will need tax returns from the last two years
- Divorce decree (if applicable)
- Loan documents on your current home (if applicable)
Instructions
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Contact your Loan Officer and let them know you want to schedule a meeting to get a mortgage loan preapproval. The loan officer may ask questions to prepare for your meeting:
What type of property do you want?
How much down payment you have?
Where do you work and how much you make?
Do I have permission to perform a credit search?
The loan officer will let you know what documents you will need to bring to the meeting.
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Apply for preapproval. During the meeting, the loan officer will ask more questions to understand your mortgage needs. He will need as much information as you can provide.
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Ask the loan officer to show and explain your credit report to you. This one of the most important factors in qualifying for a mortgage. It is better to know now if your credit score is too low than to find out after you have made an offer on a home.
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Give the loan officer the required documents. She will use your pay stubs, bank statements and other documentation to help you find the best mortgage for your needs.
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The loan officer will submit your mortgage application for processing and underwriting. The underwriter will consider your credit history, income-to-debt ratio and your level of savings. Your loan officer will explain the mortgage, the estimated interest rate, the estimated monthly payment and the estimated closing costs.
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A Good Faith Estimate and Truth in Lending Disclosure, which outline all the details of the mortgage offer, will be mailed to you within three business days.
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Provide your real estate agent with a copy of your mortgage preapproval letter.
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If it takes a few months to find a property, your financial information may change. Your mortgage company may require updated documents to go forward with your actual mortgage loan approval.
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Tips & Warnings
Lenders will ask you to pay for the credit report required for the mortgage loan pre-approval. However, this is normally the only fee you for the pre-approval.
Many Problems in your mortgage situation can be resolved prior to your purchase and prevent surprises that could delay or end your purchase.
Pre-qualification and Pre-approval letters are two different things. A pre-qual gives you an idea if you can get a loan. It is helpful, but does not carry as much weight as an actual pre-approval.
If you are denied, find out what you can do to increase your chances of getting a mortgage approved in the future.
This is not an absolute guarantee of a mortgage. Your financial situation may change or the home you choose may not qualify for the loan.
References
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