When shopping for a home it is very important to at least talk to me to go over some figures to get an idea of what you can actually be approved for. This will take all of ten minutes and is painless. The obvious benefits are comfortably knowing what you can afford and feeling secure with the payment.
Typically when you are searching for a home a listing agent will always ask for a pre-approval. Being prepared is always a good thing.
You may have heard of the terms pre-qualification and pre-approval used a lot. They are similar, but with some differences. The pre-qualifications are based on assumptions. Basically over that ten minute phone call I will ask for your income, asset and credit history information and take your word for it without verifying them. This is a pre-qualification. Sometimes this may be enough. If you feel confident that the information you provide me is accurate and have no problem documenting this, then we are set with this process.
A pre-approval is when you actually supply me with the information regarding your income, assets and allow me to pull your credit. There is more security in this, and it will actually give you a head start in the process in that I have all this information and we are ready to move forward if you actually find a property and go to contract.
Below is a list of the documentation that we need for a pre-approval:
- Two most recent and complete tax returns; all schedule ( for self-employed borrowers)
- Two most recent W2′s
- Two most recent paystubs
- Most recent and complete bank statements; all pages
- A copy of your photo ID