Are you considering buying a home within the next 12 months? If so, you may be curious about the steps to homeownership and how the pre-approval process works. Mortgage pre-approval is the first step to securing your new home. Today, we are exploring each process step so you know what to expect from day one!
Begin the Pre-Approval Process
If you’ve decided to purchase a home – whether within a couple of months or sometime over the next year – loan pre-approval is a crucial part of the home buying process. So, what can you anticipate when applying for mortgage pre-approval?
- Contact a Home Mortgage 411 loan professional and let us know you want to begin the home loan process.
- We will send you a link to our online application.
- You will answer questions regarding your full name, date of birth, employment status, assets, and liabilities.
Upload Documents Needed For the Pre-Approval Process
As you complete your application, you will notice that you must upload several documents. These documents help us determine your eligibility for a loan and how much you can borrow for a new home.
Because not everyone’s situations are identical, these requests may vary case by case. With that said, the following is what you may be required to upload with your application.
- W2s from all sources of income from the last two years
- Year-to-date pay stub covering 30 days
- Year-end pay stubs for the previous two years (if you’ve received bonuses and overtime pay)
- Previous two years’ business tax returns
- Last two years’ personal tax returns
- Photo identification
- Previous two months’ bank statements
What We Examine After You Submit Your Application
Once you submit your application and we have all the required documents, we will review your information. We can determine your maximum home purchase price by analyzing your pre-approval application.
We will look at your current income, pull your credit score, verify employment, and review your monthly debts and assets. We will also determine how much money you have available for your down payment, closing costs, and any additional costs associated with the transaction.
Our assessment helps us establish “how much house” you can afford and indicates which loan program might be best for your circumstances. Along with your prospective home’s price range, we will provide what you can expect to pay in monthly mortgage payments.
Quick note: We offer an in-house credit improvement service to hopeful home buyers needing “credit TLC.” And here’s the best part: Creditool comes at no cost to our mortgage loan applicants! Don’t hesitate to contact us with any questions about our credit improvement service.
Your Loan Consultation
During your loan consultation, we will share what to expect next and answer all your questions. Once the pre-approval process is complete, we will send your pre-approval letter to your real estate agent.
You and your agent will submit the pre-approval letter to sellers as you make offers on homes. When you submit an offer, please send your loan officer links to those properties so we can provide better loan and payment estimations.
Get Approved and Work Towards Closing on Your Home
Once a seller accepts your home offer, the next step is the loan approval process. During this time, you will fill out a complete loan application. There’s no need to feel overwhelmed during this step because you already completed most of this during the pre-approval process. You will need to submit additional information and a few more documents to tie up all loose ends.
Here are a few more things you can expect during this step:
- Your application will go to in-house underwriting, either automated or manual underwriting. This department takes an in-depth look at your application and makes the final approval decision.
- We will order a home appraisal around the same time, which is a property analysis determining the home’s fair market value.
- Lastly, we will request a title search to uncover any existing liens, judgments, or other issues that could interfere with your purchasing the home.
Officially Close on Your New Home
The final step is closing on your new home – congratulations! You made it to the day for which you’ve been waiting.
We will send the necessary loan documents to your closing attorney, including all “final numbers.” The closing documents cover every loan detail, so you will not experience surprises after closing.
And, as always… Before, during, and after closing, we are here to support you and answer your questions!
If you have questions about the pre-approval process or the steps to homeownership, please don’t hesitate to contact us. From pre-approval to closing, we strive to make your mortgage experience as smooth and hassle-free as possible.
Don’t forget to check out our helpful video library, where we share real estate investing advice, first-time home buyer tips, credit score information, and more!