How to Get Pre-Approved/Pre-Qualified For A Home Loan/Mortgage!

A Pre-approval is a letter from a lender saying that a borrower qualifies for a certain loan amount, based on review of the borrower's income and credit history. Pre-approval letters are generally valid for 2-3 months.

There are many important reasons to get pre-approved:

• To Find Out How Much You Can Afford - If you are getting a loan, it is important to get an accurate idea of how much you can afford. You might be able to afford more or less than you think, and you don't want to waste your time looking at homes outside of your price range.
• A pre-approval letter makes your offer much stronger when you finally find your dream home. Sellers do not want to take their home off the market and waste their time if they do not know that you will most likely be able to get a loan. Without a pre-approval, your offer will not be taken as seriously.
• You can contact any lender or local bank/credit union in order to get pre-approved/pre-qualified within a day or so.

Documents you'll typically need to provide to get a pre-approval:

• Your W2 from the past 2 years
• Your paystubs from the past 3 months
• Your tax returns from the past 2 years
• Your checking or savings bank statements from the past 3 months (proof of down payment funds)
• Your statements for all assets (stocks, bonds, retirement accounts) from the last 2 months
• The name and phone number of your landlord (if you are are a renter) or your current mortgage documents if you already own a home
• Your divorcee decree, if applicable
• If you are self-employed: Your business tax returns from the past 2 years, in addition to your year-to-date profit and loss statement, and year-to-date balance sheet
  

The lender will also need to pull your credit report/score for you and any co-borrowers. They will look in your credit report for red flags such as missed payments and high overall debt. Generally, a score over 720 will get you the most competitive mortgage interest rates. 

If you don't get pre-approved, there are a few things you can usually do to help:

Correcting errors on your credit report and/or raising your credit score

Decreasing your overall debt and improving your debt-to-income ratio

Increasing your down payment amount

Feel free to contact me directly at (310) 717-1312 or JamieTian@RodeoRE.com if you have any questions about the home buying process, or if you need me to recommend a few lenders to you.

Please feel free to visit my website at www.JamieTian.com and click the "Search Listings" tab above to search homes for sale!