Why should you get pre-approved for a
Getting a pre-approval letter gives you substantial leverage.
Sellers immediately see you as a serious buyer. Not only will you know the exact price range you can afford, you'll be able to negotiate a better deal and move faster when you see a house you like. You'll need to supply information to verify your income, credit history, debts and assets. Lender’s will then issue a letter stating that your mortgage is pre-approved for a certain dollar amount. This will also make the job of your realtor easier. That way they won't show you homes that are out of your comfort zone.
Different lenders have different versions of what a pre-approval means.
Pre-approval can mean as little as we discussed your assets, employment, debts and an estimate of what your FICO score is. It is better to go beyond this basic preapproval and go ahead and supply the lender with bank statements, paystubs and tax information such as a W-2 or tax returns. It is also a good idea to go ahead and get your FICO score, since 80% of credit reports have errors on them. If you take things a step further and provide all of this information, the chances of any last minute underwriting surprises are greatly reduced. Since most loans go through an initial automated underwriting system, it is a good idea for the lender to go ahead and take this step as well.
The goal of getting pre-approved is to find out what you qualify for, get comfortable with a mortgage payment ,and let the realtors involved know that your loan is likely to go through.
The more information you provide upfront, the less likely you are to have any unforeseen issues. It is important, once you get pre-approved for a mortgage, avoid taking on any serious new debt and make timely payments on all existing debts. Otherwise you risk degrading your credit rating partway through the buying process.
To get a pre-approval letter or if you have questions about the pre-approval process, feel free to contact me. It will normally only take 10-15 minutes of your time.
Toby R. LaneDirect: 404-574-2609
Senior Loan Consultant