If you intend to buy a house using a mortgage, you should consider getting pre-approved for a mortgage before you begin searching for the home. The process gives you the opportunity to discuss budgeting and loan options with the lender as well as alerts you of any problem that may hinder you from getting the mortgage. You will also know the maximum amount that you can borrow and try getting the best deal using MyInstantOffer Pre-Approved Loan, which will help you determine which houses to shop. There are various things which you need to present to your lender for you to get the pre-approval letter, some of which are discussed below.
Proof of Income
You will need to show some proof of income for the lender to have confidence that you are able to pay. For this, you will need to present your W-2 statements for the past couple of years, your recent pay stubs, and proof of any other additional income like bonuses or alimony. You also need to show your tax returns for the last few years.
Proof of Assets
You have to present your investment account statements and bank statements to work as proof that you are able to cater for the down payment and closing costs. The down payment will vary depending on the loan type you wish to get. Some lenders may require you to get mortgage insurance, especially if the down payment is less than 20%. Assets show that you can repay the loan and improve your chances of pre-approval even when you have a low credit score.
You need to have good credit score for you to qualify for a mortgage loan. The exact credit score will depend on the type of loan that you are applying for, but most lenders go for a minimum of 620. Having a good credit score may also influence the interest rates that will apply to you as well as the amount that you will have to pay as down payment.
The lender will most likely want to know about your employment status and the amount of money that you earn. For this, you may have to provide contact information of your employer. A stable job will increases your chances of getting pre-approval. If you are self-employed, you will need to provide additional paperwork regarding your business or source of income.