MORTGAGE 101
What Is Loan Pre-Approval?
Welcome to Mortgage 101. We help home buyers and realtors understand home loans. You’re in the right place if you’re thinking of buying your first home, if you’re moving to your next home, or if you’re ready to refinance your existing loan.
What Is Loan Pre-Approval?
Pre-approval is a formal review of your personal documents by a lender to make sure that you can perform when you go under contract to purchase a home.
It also is the time to clear up any red flags before they become a problem when you’re putting a contract on a home of your dreams.
How To Get Pre-Approval
If you are shopping for a home with a realtor or online, you’ve probably come across the word “pre-approval”.
Pre approval is when you provide all the necessary documents and information to your lender. They use this information to verify that you can perform when you go under contract to purchase a home.
Pre-approval happens before your loan request is presented to Underwriting. This is a great time to make sure there are no red flags, or to clear up any red flags before you go under contract to purchase a home.
Why All The Documents?
Your lender will go through all of your specifics to offer you the best loan options for your personal scenario. The lender will review your credit history, income history, employment history, all of your assets, bank statements. All of this is to see what will work best with the various loan programs out there, and there are a LOT!
Why Do You Need Pre-Approval?
When you are shopping for a home, your real estate agent will make sure that you get pre-approved for a loan. It is important to take this first step before you go house hunting, because you cannot make an offer on a home with out a pre-approval letter from your lender.
You’ll Be Prepared
Make sure that you understand the terms of the financing that is available to you. Find out what the monthly payment is and what cash you will need for closing.