Before you start touring homes you need to have a pre-approval letter from a lender. It is important to work with an experienced realtor and mortgage lender to create a team that is looking out for your best interest in the first steps to home fiancing. These professionals will help you save a lot of time and money.
The Pre-approval process
When searching for your dream home, an important first step is to get pre-approved for financing. Most experienced lenders can pre-approve a potential buyer in 24-48 hours. They will then issue the buyer a pre-approval letter, which includes the total purchase price the buyer is qualified for. When sellers receive an offer based on financing, they will want to see a pre-approval letter showing that the buyers are qualified.
Lenders examine three things needed for pre-approval:
- Debt-to-Income (DTI) ratio
Once you receive your pre-approval letter from the lender, the search is on for finding your dream home!
Lender requirements can vary, but here are some common things they may ask for:
- Personal information such as: social security numbers, birth dates, address history, and photo identification
- W2s or 1099s for the past 2 years
- Bank account statements
- Current mortgage and rent payments
- Documentation of assets such as investment and retirement accounts
We realize there are a lot of moving parts in the process, and the lender and other parties involved in the transaction will be asking for a lot of information. Do your best to remain calm and submit all documents required as soon as possible. This will ultimately help you at the end to show that you are a qualified and serious buyer.
The most important thing to remember during the closing process is: don’t do anything that will affect your credit! Avoid opening or closing credit cards. Do not make any large purchases.
We are here to help in any way we can at any part of the process if you are not already working with a realtor. Do not hesitate to contact us if you are looking for a referral or need a step-by-step person in your corner to support you on your home-buying journey.