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.

Getting Pre-Approved:

Getting Pre-Approved

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?

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

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.

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