Loan Pre-Approval

Posted at 10:10 PM, Jan. 15, 2007

One of the first things I do when I work with buyers is to have them pre-approved with a lender.  Pre-qualifying for a loan is only based on verbal information given to the lender from a buyer.  Pre-approval is when the buyer has sat down with a lender and filled out an application.   It usually takes a couple days to verify the information and then the lender supplies you and your REALTOR® with a letter stating you have been approved for X amount of dollars. A pre-approval letter is GREAT ammunition when writing and presenting a purchase contract.  Sellers love to be able to see that the buyer is serious enough to have met a lender and that they actually do qualify to purchase the home at the price the buyer is offering. 

It is always best to do this at the beginning of the home search so that you are not wasting your time or your REALTORS® time.   You may think you can only qualify to purchase a home in the $200K range, when in fact after taking all into consideration, your lender says you actually qualify for $250.  Or it could be vice versa.  You spend weeks looking for the perfect home only to find out you don't qualify for the price of the home.  How frustrating can that be!! 

You want to be sure and take the following items (for all parties applying for the loan) to the lender:

• Driver's Licenses
• Social Security Card
• Last 2 pay stubs
• Last 2 years W-2/Tax returns
• 1st and 2nd mortgage statements on any property you currently own
• Hazard Insurance Declarations page
• DD214 or eligibility certificate (if applying for a VA loan)

I have several preferred lenders that I use.  If you need some help getting started on this please e-mail me