How to Get a Pre Approved Mortgage

Obtaining a pre-approved mortgage guarantee accelerates the process of buying a residence for a potential home owner. With a pre-approval letter, you are taken seriously by the lenders, who are further willing to lend you a defined amount as made obligatory by the guarantee.

Instructions

  • 1

    Compare mortgage rates

    You need to shop around first to compare the rates on offer. This can be done online where some of the lenders will provide you the estimate. Moreover, contact your local bank or any other financial institution and compare their rates with ones you obtained online.  Also take into consideration length, up-front fees etc.

  • 2

    Sorting out finances

    Gather all the relevant income documents including bank statements, tax returns, pay stubs etc from the past couple of years. Also take into consideration your current income, any savings, as well as cost of all expenditures.

  • 3

    Reviewing credit score

    Sort out your credit score for any irregularities. Contact the credit agency bureau and correct for errors. Having a good credit score will allow you to obtain a sizeable loan, along with a reasonable interest rate. The credit bureau offers free credit score once a year and you will need to inform the broker about it in order to obtain correct mortgage estimates.

  • 4

    Narrow your options

    Having carried out an extensive search earlier; you must now be in a position to pick two or three lenders of your choice. Choose one with whom you have worked before or feel comfortable.  However, deal only with reputable lenders.

  • 5

    Liquidity

    Make sure you have the cash amount to make down payments and any other upfront fees. Having cash in liquid form will ensure that you get fair quotes.  For a housing estimate, have at least 10% available in cash – 5 % down payment plus an additional 3 to 5% in closing cost, which will include insurance title.

  • 6

    Meeting with a mortgage broker

    Set up a meeting with a mortgage broker for pre-approval. Carry the necessary documentation process and hand out all personal details - address, social security no, debt amount and employer verification.

  • 7

    Find a home

    Now shop around and choose a home. The length of pre-approval mortgage is usually between 60 and 120 days so buy a home during that time. If you are having difficulty in finding a residence, contact the lender and increase the length of the mortgage guarantee.

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