Bob HatchGetting a mortgage preapproval letter is the first step in the house-buying process. A mortgage preapproval letter is what shows that a lender has checked your credit report and is willing to provide you with a mortgage.
Getting preapproved guides you in your search for a house as it gives you an idea of what you can afford. It also lets sellers know that you’re a serious buyer.
Without further ado, let’s take a look at how you can get pre-approved for a mortgage.
How to Get Preapproved for a Mortgage
- Check Credit Report
It’s always a good idea to check your credit report even before you begin the process of mortgage approval. This gives you an edge as you’re able to review your credit history, prepare ahead and resolve any issues you might have with your account before applying for mortgage pre-approval.
Simply send a request to the three major credit bureaus for a copy of your credit report. You can also request free annual copies of your credit report from annualcreditreport.com.
- Ready the Necessary Paperwork
Be prepared before starting your application process. You should know all the documents needed and ensure you get them ready before you go to your lender. This will make the process a lot easier.
- Send In Your Application to Multiple Lenders
After gathering all the necessary documents, the next thing to do is submit your application. It’s always wise to apply to multiple mortgage lenders. This ensures you have different options. You can weigh your options and choose the lender with the most favorable terms.
Just make sure that when you’re applying, you provide honest answers to the questions and submit all the documents necessary.
- Get Pre-Approval Offers
Once a mortgage lender has gone through your credit score and financial records, using your information, it will determine whether or not you’re qualified for pre-approval and what amount you can receive.
If the lender approves you, you will receive several pre-approval offers to state the loan types that you’re recommended for and the amount that you have been approved for. Your estimated monthly mortgage payment and interest rate will also be stated in the offer.
- Receive Pre-Approval Letter
Once you have selected a mortgage option from the offers provided to you, your lender will send to you your pre-approval letter. You can now take your letter with you when you go house shopping.
Necessary Documents for Pre-Approval
Below are some of the necessary documents for getting a mortgage preapproval letter.
- Credit score
- Proof of assets
- Employment history
- Debt-to-income ratio
- IDs such as a driver’s license or a passport
- Divorce records (if any)
- Alimony payment records (if you owe any)
- Social Security Number
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