Updated: Aug 12, 2020
Ready to Get Preapproved? Here’s What You’ll Need!
Prepare yourself for one of the biggest purchases you'll ever make with a checklist that says this isn't your first rodeo.
How many times have you gone on Zillow or homes.com just to "see what's out there"?
Are you on a first name basis with every host on HGTV? Do you tour model homes like it's your job? I'd say the thought of buying a new home has crossed your mind at least a half dozen times. So what are you waiting for? Let's get you prepared for preapproval!
Pre-approved vs. Pre-qualified
When you’re ready to buy a home, there’s a laundry list of things to be done but none more important than asking yourself "How much can I afford?" Often times we get swept away in the excitement of finding a home and the design aspect that we don't think about the steps before the home search begins. This is what I like to call the "Double D Recipe" - disaster and disappointment and I don't cook with either one of those ingredients. You wouldn't put the cart before the mule as the saying goes. Certainly not since the cart can't pull the mule. Instead, providing guidance and information in preparation of their new home purchase sets my clients up for success which results in a winning outcome for everyone. You'll want to start by getting either prequalified or #preapproved. So what’s the difference?
With prequalification, a lender uses a snapshot of your financials based on your credit, income, and liquid assets you may have to estimate how much you could potentially borrow. This will give you a good idea of your readiness to buy a home and make you aware of improvements that can be made to your credit and or savings to maximize your buying power. To actually begin the home-buying process, you’ll need to be preapproved, which consists of verifying your income, employment, any assets you have and debts in real time. You'll start by submitting documents to verify the above-mentioned requirements to your lender. We recommend providing any requested documents to your lender within a week of request. With most of these documents already accessible, they should be easy to provide however, some requested information like documents from the county or an attorney, for example, could take longer. If this is the case, maintaining good communication with your Realtor and Lender will help to keep things on track.
At IMAJIN Real Estate & Consulting, we focus on moving our clients through the preapproval process right from the start to avoid any delays and surprises to provide a smoother closing process. You can find more information by visiting imajinrealestate.com.
Need help preparing for preapproval? You’re just a click away from your Free Consultation.
Ready, Set, Check!
The documents your lender will request of you will be based on your circumstances but you can expect to have many, if not all, of the documents (relative to your situation) in our checklist of champions on hand. Having them readily available for your lender will save time, prevent document-related delays, and show your Realtor and lending team that you're serious about your purchase. Who wouldn't appreciate someone who came prepared to play? Ready, set, check!
Employed? Here’s What You’ll Need!
- Social Security number
- Two most recent pay stubs
Self-Employed? Here’s What You’ll Need!
- Year-to-date Profit Loss Statement (2 years)
- 1099s used
- Tax Returns (2 years)
And Don’t Forget These!
- Documentation of additional Income such as Real Estate Income – Rental Income (Address, lease, and current market value of the property if planning to use the income to qualify)
- Child Support, Alimony, Down payment gift letter, etc.
- Bank Statements (60 days) for every account being used for qualification
- Renters should provide proof of payments for the past 12 months and contact information of Landlord for the past 2 years.
- Divorce decree, any court orders for child support or alimony payments
- Bankruptcy or Foreclosure information (Lenders will need to know to determine how long you should wait before jumping back into the housing market)
Got Debt? Include Monthly Payment Info for:
- Student Loans
- Credit Cards
- Auto Loans
- Mortgage Loans
- Utility bills and other regular payments (Little to no credit)
- Current mortgage – Most recent mortgage statement with loan number, loan amount, and loan balance, and declaration page of home insurance policy.
At first glance, this could seem overwhelming. Not to worry. We're here to help. Even if you're not ready to buy at this time, we want to equip you with an abundance of information that primes you to purchase with confidence! If you still have questions about the preapproval process, contact us at firstname.lastname@example.org for more information.