By Diego Arteaga, Mortgage Loan Officer
Getting a mortgage might seem like an overwhelming task, but being prepared and having the right documentation upfront can make buying a home and obtaining a mortgage a smooth process. Getting pre-approved for a mortgage before you go home shopping isn’t required, but it is a good idea so your realtor knows what value of home to help you find and the seller knows you are a serious buyer.
When getting pre-approved, financial institutions want to see how likely you are to repay your mortgage; thus, they make their decision on three factors: income, assets and credit.
Once you are ready to get pre-approved, talking to a mortgage loan officer is the first step. The loan officer is going to ask for the following documentation at a minimum. It’s more than likely you have many of the documents on hand. If you are self-employed or have income from many sources, they may ask you for more documents. Note that the paperwork required to verify income depends on your personal situation:
The mortgage loan officer should be able to determine the income and the assets that can be used to qualifying for a mortgage based on the documentation provided. The next step would be for the mortgage loan officer to pull credit. Many lenders pull from all three credit bureaus – Experian, Equifax and TransUnion. For this they will need your residence time for two years, your social security number and date of birth. Depending on the credit score, the mortgage loan officer should be able to determine the best program. The mortgage programs vary depending on credit score, down payment options, loan amounts, down payment assistance and debt ratio.
After the pre-approval is obtained, the borrower should have the peace of mind of knowing what program, what term and approximately what payment is qualified for.
Happy home shopping!