Buying a home takes a lot of time, requires a lot of patience, and means sifting through a mountain of paperwork. And while you can’t cut corners or shuffle things to the side to make things go quicker, there are things you can do to help the process speed along a little faster.
One of those things is getting loan pre-approval. Not only can it help you clearly understand your finances and allow you to create a budget so you can see, in black and white, where your funds go each month, but it can also help you and your realtor know what you can afford and assist in negotiating with a seller. Additionally, sellers will know you are a viable buyer and may be more confident in the negotiations when you show them you are pre-approved for a mortgage loan.
Getting speedy pre-approval does not involve a lengthy process as actually submitting and applying for a mortgage loan, but it still requires some preparation. Being prepared to submit the documents to your potential lender and include everything they need to complete their evaluation for a pre-approval, will make things go swifter and smoother.
Before you request your pre-approval, make sure you have the following information and documentation ready to go so you can get approved fast:
- Financial information, including income and assets. You should have a general sense of what you’d like to spend on a home, what you can afford monthly and the amount of your estimated down payment. You will need to provide proof of your income by having your current paystubs, current W-2’s from all employers, and your previous 2 years tax return. Additionally, you will need to provide proof of assets, such as bank statements, retirement accounts, and investment accounts of any kind. This enables your lender to fully evaluate your financial conditions and determine how viable of a borrower are.
- All of your pertinent personal documentation. Things like your driver’s license and Social Security number are important, so have them ready to go. Be prepared to discuss your job history, financial condition and any negative items, such as late payments, collection actions or bankruptcy proceeding. Depending on the lender you’re working with, they may want more – check with them to ensure you have everything they need.
- Estimate your credit score. You don’t have to pull a full report, but it’s a good idea to know your score – or at least an estimate of it – so your lender is able to get an accurate picture of what kind of loans you will qualify for, and what kind of interest rates you’ll be looking at. With your permission, your lender can obtain a copy of your credit report to further evaluate your credit situation.
While it’s great to be able to work with a lender in person to secure your pre-approval letter, another way you can save time is by applying online for a pre-approval letter. You’ll be expected to share all of your personal and financial information through their online form, so make sure you’re aware of their privacy policies, know exactly how your information is going to be used, and have their assurance that your private information will be treated with the utmost respect and care.
Before you know it, you’ll be shopping for your new home.