Getting Pre-Approved For Mortgage Is First Step Of Home Buying Process In Illinois
This article is about Getting Pre-Approved For Mortgage Is First Step Of Home Buying Process In Illinois
The mortgage process should not be difficult nor stressful as most first time home buyers believe.
- As long as you get a proper mortgage pre-approval, the overall mortgage application and underwriting process should not be difficult
- There is no reason why borrowers with solid pre-approval letters should not just close, but close their home loans on time
- Once home buyers find that perfect home, they would want to make sure they are prepared to act quickly and make a reasonable offer that looks attractive to sellers
- Getting a solid pre-approval is the most important part of the mortgage process
In this article, we will discuss and cover the importance of getting a solid pre-approval during the home buying and mortgage process.
Sellers take you more seriously:
- Getting pre-approved on a home loan is a simple way to show sellers that you’re a serious, motivated buyer
If they have more than one offer on the table then it’s likely they’ll choose yours:
- This holds true since there’s a better chance that the deal will go through with a buyer who is pre-approved for a home loan than one who is not
You’ll have an easier time finding the right home loan:
- Once you’re pre-approved, you’ll have a base to begin “comparison shopping” between different lenders and types of home loan
When you’re buying something in the thousands (not to mention the millions!), even a one-point difference can make a big impact on your wallet.
Difference Between Getting Pre-Approved And Pre-Qualified?
Getting “pre-qualified” is when a lender reviews your financial situation and gives you an estimate of how much you can afford after briefly reviewing your credit scores and debt to income ratio.
- Keep in mind that the amount you can afford may be smaller than the amount the bank is willing to lend a home loan
- Getting pre-qualified for a home loan can help you stick to your price range, rather than the maximum home loan amount
The pre-approval process is more substantial:
But you’ll end up with a pre-approval letter that states the actual size of the home loan:
- and it’s this letter that holds weight with sellers
If you’re serious about buying a home, getting pre-approved is a smart first step.
How Does Getting Pre-Approved For Home Loan Process Work?
First, you’ll be asked to fill out an application with a lender. The lender will gather a variety of background information regarding your income, employment status, and tax forms. Specific documents you may be asked to submit to a lender for pre-approval include:
- W-2 statements, or 1099s, for the last two years
- Copies of your most recent bank statements for all accounts including checking, savings, etc.
- Recent pay stubs from your job and proof of any other income you may have
- Proof of assets such as IRAs, stocks, bonds, or mutual funds
- Some lenders require an application fee –
- be sure to ask!
Applying For A Mortgage
Borrowers can apply online or via telephone.
- I can issue a borrower a pre-approval if the borrower apply here at www.gustancho.com and click on the APPLY NOW icon on the top left corner
- The borrower and co-borrower, if there is a co-borrower, need to fill out the online application as detailed as possible and submit it
- Once the borrower submits it, I get alerted via email that there is a pending application and review it with the borrower and make sure the application is complete
- I then submit it to our automated underwriting system for an approval
Getting Issued Solid Pre-Approval Letter
Once approved, I certify a pre-approval letter to the borrower so they can start shopping for their dream home.
- Once the borrower finds a home, they forward me the real estate purchase contract and the formal application process starts
I can close most loans in 30 days or less as long as the borrowers work with me in getting me the documents necessary for the lender such as the following:
- income tax returns
- bank statements
- letters of explanations
- other conditions as they come up
Keep in mind that being pre-approved does not guarantee that a lender will give you the loan – it simply means than if nothing in your financial situation changes, you’re likely to get a loan. When the seller accepts your offer on a home, the lender that has pre-approved you will then formally approve your loan.