Getting Pre-Approved

The Homebuying Process

in 10 Easy Steps

The Process

The pre-approval process is very straight forward and easier than you would think. The first step in the mortgage process is to take an application. Your mortgage application can be filled out online or taken over the phone by a licensed loan officer. Some of the information that must be provided includes employment history, address history, and personal info such as name, date of birth, and your social security number. Once this information is received a credit report must be pulled. The credit report will be the foundation for the entire mortgage. If your application and credit look good, you will be asked to send over documentation that includes, but is not limited to paystubs, W-2’s, and bank statements. Your loan officer will then work with you to determine what approval option works best for you.

Let’s review.

Submit an application
Pull a credit report
Review documentation
Review pre-approval options

It’s that simple.

Your Options

Your pre-approval will be based off of your credit score, cash to close, monthly income, debt-to-income ratio, down payment, interest rate, among other things. Although this seems like a lot, your loan officer will take care of all this and review it with you. You may also have contingencies such as a specific percentage down, or selling your current home first (if applicable)

Your pre-approval will vary depending on the following:

Type of property: Single Family, Condo, Etc.
Loan type: FHA, Conventional, VA, USDA
If the property is: Primary, Secondary, Investment
Property taxes
Down payment
Etc.

The Importance

When you are looking to purchase a home, having a pre-approval from a lender will give you the power to make a bid on a home. Without having this certified document your offer for the home is meaningless to the real estate agent and the seller. Getting pre-approved will give the seller of the home confidence that your offer will be accepted.

Pre–Qualification vs Pre–Approval

Unlike a pre-approval where your income, assets, and credit is verified, a pre-qualification is based off what you say. A pre-qualification helps give you an idea of what you could potentially be pre-approved for. This doesn’t require your credit being pulled or submitting any documentation. Although, realtors or sellers will not accept this document like they would a pre-approval.