Getting Preapproved for a Mortgage
July 7, 2022
Today, because we are in such a competitive real estate market, realtors are scrutinizing preapproval letters more than ever before. Realtors review not only the price that is being offered but the terms of the mortgage as well. They want to know the amount of the down payment and what mortgage program the potential buyer will be applying for.
Getting a preapproval letter prior to looking at houses ensures that you can move quickly when you’re ready to make an offer. Below are the 3 steps you’ll need to complete to get preapproved.
- Submit the Necessary Documentation
Your lender will need the following documentation to get the full picture of your income and financial position. Having this ready and organized prior to meeting with your lender is guaranteed to win you some brownie points and get you the fastest turnaround possible!
Tax Return & W2’s (2 Years) – This information is used to calculate your income and determine how much mortgage you can afford. It also helps determine whether you are within certain income limits for the first-time homebuyer and grant programs.
Pay Stubs (1 Month) – You may be asking yourself, “If they have my tax information why do they need a paystub too?!” Your paystub will prove to your lender that you are still currently employed and that your financial situation hasn’t changed since filing your taxes. The last thing your lender wants to do is approve you for a mortgage that you can’t afford and put you in a dangerous financial situation.
Bank Statements (2 Months) – Your lender will review your bank statements to see if there have been any large deposits that require documentation. The Patriot Act directs financial institutions to source all large deposits on bank statements, and there’s no exception when you’re getting ready to buy a home.
2. Sign a Credit Authorization Form
This is a necessary step that authorizes your lender to pull your credit and review it with you for accuracy. If you and your lender find any discrepancies reported on your credit report, they can help you to correct the data through the proper channels. Your lender can also make suggestions that could help you improve your credit scores if necessary!
3. Review Mortgage Programs and Grants
There are numerous mortgage programs available, especially for first-time homebuyers. It’s important to do your research and be aware of what programs you are eligible for in your current financial position. Down payment options vary from program to program, and there may be grants available to you that can help cover these, as well as closing costs and taxes. Your lender will help you determine which programs you qualify for, and which ones are right for you.
Now that you’ve completed these steps, you’re ready to start house hunting with a shining preapproval letter that will help you stand apart from the other applicants! With the heavy lifting out of the way, you can feel confident and knowledgeable about both your mortgage and financial situation.
At Family First, our mortgage team is there for you every step of the way to answer all of your questions. Plus, our local team at our Penfield branch maintains all your servicing, so you’ll never have to worry about where your payments are going or whom you can call with questions.
Call or text us today at 585.586.8225 to get started on your mortgage journey, or click the “Contact a Mortgage Expert” button below and we’ll reach out to you! To learn more about our mortgage options and meet the Family First team, click here.