You will need to have a variety of documents ready before talking to a lender regarding Preapproval process.
What Do Lenders Need From The Buyer?
- • Application
- • Credit report (each lender will pull their own)
- • Most recent paystubs (last 30 days)
- • Most recent W2’s (last 2 years)
- • Most recent tax returns both personal and business (last 2 years)
- • Most recent bank/asset statements (last 2 months)
- • Valid identification
- • Bankruptcy, divorce decree, child support, alimony, other?
What Do Lenders Look For?
The Buyer’s Ability to Repay the loan is based on the following:
- • Credit score, payment history, and other obligations
- • Stable employment history and consistent, VERIFIABLE income
- • Debt-to-Income ratio (DTI)
- • Down payment (source and seasoning)
- • Payment shock?
- • Reserve requirements?
Home Buyer Tip: Pre-approval can speed up your final mortgage approval. If you want to get into a home quickly, you need to go through Pre-approval process.
NOTE: A home loan pre-approval letter does not guarantee that you will receive financing from a bank, credit union, or mortgage company.
The mortgage can be denied after pre-approval for reasons that are common such as change of employment, negative item on credit, additional debt(s), issues with the appraisal, etc.