Step one on your to-do list when searching for a new home to buy should be getting a mortgage pre-approval letter from your financial institution. The pre-approval will let you know how much you can borrow and what your interest rate will be. This will help you budget for exactly how much house you can afford. Perhaps more importantly, having a pre-approval letter in-hand will show any realtors and sellers that you are a very serious buyer.

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What documents or information do you need to have to get a mortgage pre-approval?

The exact details of what is needed will vary slightly from lender to lender, but generally speaking, you will need to provide sufficient documents so that your mortgage provider can complete a thorough search of your financial records. These documents may include:

Proof of Employment: Usually at least your last 2 or 3 pay-stubs. Some lenders may need to call your employer or want an letter from the employer confirming your employment status.

Proof of Identity: You will usually need to provide your driver’s license, passport, social insurance card, or similar documents.

Credit Score: Your lender will usually carry out a hard pull on your credit to check your score. You will need to agree to this.

Tax Verification: You will need to provide your last three years of tax returns.

Financial Statements: Your lender is likely to request at least a few months of financial statements from all of your accounts. This may include checking, savings, credit unions, etc.

Explanation of Irregular Income: If you have any unusual income showing on any of your forms, you will be required to provide a detailed explanation for it.

Some lenders may require additional documentation or information in addition to this, but you should expect to present these documents at the bare minimum.

What to do if your pre-approval is rejected

In some cases, the financial institution may decide that you either do not have sufficient documentation or that they do not believe you are a good fit for a mortgage at this time. If this happens, you can either opt to speak with a different lender and seek pre-approval there or you can spend a little longer working on your finances before trying once again to get that pre-approval letter.

What to do after you are pre-approved for your mortgage

If the financial institution approves your application through the pre-approval process, you can then move on to the next step in the home buying process – contacting a Realtor® and checking out some houses. This is the fun part, but do not forget to remain financially responsible when making your eventual buying decision. It will be a requirement of your pre-approval.

How long is a pre-approval valid?

 They are normally valid for 90 days.

If you need help getting a pre-approval, please do not hesitate to give me a call.  I would love to get you into your dream home.