Before you even start looking for a home, I always advise buyers to get Pre-Approved by a loan officer. What this helps to do is not only give us a price limit as to what homes you can afford, but also helps us to better negotiate with the sellers when we do find your dream home. Sellers are more agreeable to negotiate with a Pre-Approved buyer than one that isn’t.
What is the difference in Pre-Qualified and Pre-Approval?
Pre-Qualification is normally issued by a loan officer, who, after interviewing you, determines the dollar value of a loan you can be approved for. However, loan officers do not make the final approval, so a pre-qualification is not a commitment to lend. After the loan officer determines that you pre-qualify, he/she then issues you a pre-qualification letter which then is used when you are making an offer on a property. The pre-qualification letter indicates to the seller that you are qualified to purchase the house you are making an offer on.
Pre-Approval is a step above pre-qualification. Pre-approval involves verifying your credit, down payment, employment history, etc. Your loan application is submitted to an underwriter and a decision is made regarding your loan application. If your loan is pre-approved, you are then issued a pre-approval certificate. Getting your loan pre-approved allows you to close very quickly when you do find a house. A pre-approval can help you negotiate a better price with the seller, since being pre-approved is very close to having cash in the bank to pay for the house!
What Do I need to get Pre-Approved?
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A copy of the Purchase Contract(if you are getting Pre-Approved before we have the contract, I will fax the necessary paperwork to the Lender)
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Your checkbook for the application fee (contact the Lender for the amount you will need to bring.)
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Social Security Numbers for each borrower along with your Driver’s License or Photo ID.
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Most 3 recent pay stubs.
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If you receive Social Security or Disability income, bring a copy of a typical monthly check.
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Past 2 years of W-2’s with completed Federal Income Tax.
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Any 401-K or Retirement Accounts.
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Past 3 Months of Bank Statements.
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Names and Addresses of ALL Employers for the past 2 years.
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If renting, bring the Landlord’s name,address, and phone number. Include the monthly rent amount and past 3 cancelled checks paid for the rent.
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A copy of all stocks and bonds along with 3 Savings Accounts statements.
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A complete list of all monthly debts, their account numbers, amount owed and monthly payments of each one.
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If divorced, provide a complete copy of your divorce decree and seperation agreement along with any documented child support.
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If bankruptcy has been declared within the last 10 years, you will need to provide discharge documents.
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If applying for a VA loan bring your DD-214 and Certificate of Eligibility. If you are still on active duty, bring a statement of service.
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If you have a co-signer, they will need to come with you and bring everything stated above.
Being a Pre-Approved buyer is very important, and bringing all necessary documents helps to make the entire process go smoothly. If you need help looking for a home or need a recommended loan officer, call Charlene Fay at 513-602-9000 or email us at CharleneFay@REMAX.net.
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