What The Preapproval Process Is For Home Mortgages

Posted on: 5 June 2017

If you plan on buying a house in the next few months, the first step you should take is getting preapproved for a loan through a lender of your choice. The preapproval process does not guarantee you a loan, but it will let you know if you are qualified at this time for a loan. Here are three things to understand about the preapproval process.

What getting preapproved means

When you want to buy a house with a loan, getting preapproved from a lender is something you must do. Preapproval is something a lender offers when a person meets the criteria necessary for a loan. When a bank preapproves you, it means that you qualify for a certain type of loan. The preapproval also offers a maximum amount you can borrow. Before you can shop for a home, a real estate agent will ask you if you are preapproved. If you are not, the agent may tell you to do this before you begin looking at homes for sale.

The documents you will need to get preapproved

The process of getting preapproved for a loan is almost as difficult and time consuming as the process required for closing on a loan. When you apply for a preapproval, the lender will ask for a lot of different documents, and the lender will use these to verify your financial state. Some of the documents you may need are W-2 statements, tax returns, pay stubs, saving's account statements, bank statements, and proof of assets. Your lender will also ask you to sign a form that allows them to check your credit. Once they review all these things, you will find out if you are preapproved for a loan.

How getting preapproved saves you time when buying a house

There are several benefits of getting preapproved for a loan before you shop for a house. The first benefit is that it helps you know what price range to stick with when house hunting. The second benefit is that your preapproval will help speed up the process of closing on the house you choose to buy. The lender will already have all your paperwork and documentation, and the lender will have already verified all of it. Because of this, you might be able to close on the loan faster.

If you want to buy a house and will need a loan for the purchase, you should talk to a lender soon. Your lender can help you with the preapproval process and will give you an answer as to whether or not you are preapproved to buy a house