It is desirable to have a pre-approval letter from a lender before the home shopping process begins. This way, when the perfect home is found we can immediately move forward with an offer that will be taken seriously by the seller. If there are multiple offers, yours will move to the top of the stack with a pre-approval letter.
What is pre-qualification? What is pre-approval?
Pre-qualification (prequal) is a relatively informal process by a lender who will have you fill out an application, which is usually available on line or through their app with a quick credit check. This is usually good enough to write an offer. A more in-depth preapproval process is explained below. It’s not a bad idea to go ahead and go through the preapproval process, but in the interest of time and the ability to make an offer more quickly, prequal will usually suffice to get a property under contract.
Pre-approval is more formal than pre-qualification and it takes a bit more time. To get pre-approved, you will provide your credit history, employment, and down payment funds, all of which will be verified.
The Benefits of Pre-Approval Include:
Loan Application Checklist:
Other Additional Documents:
Copy of most recent 2 years complete tax returns to verify investment income/cost (if applicable)