Home Loan Pre-Approval
Stressed out about buying your first home? Let Thrive Lending Group help! Here’s everything you need to know about the pre-approval process and how it can make your home buying experience as seamless as possible.
The Importance of Getting Pre-Approved
The majority of home sellers will expect buyers to have a pre-approval letter before selling a property. This is because pre-approval acts as proof that you have the necessary finances to complete the transaction. Sellers also tend to be more willing to negotiate with buyers who can prove that financing is available. A pre-approval letter could also help you gain the edge over your competition for a property with several offers.
Getting pre-approved will also help you, as a buyer, gain a better understanding of your current and future financial situation. It takes away some of the fear and anxiety associated with making big financial commitments and buying a house for the first time. At Thrive Lending Group, we can help you get pre-approved while also educating you on the home buying process. This way, you’ll be more confident in your decision.
What You Need to Be Pre-Approved
Here is a list of documentation you’ll need to provide in order to prove a healthy financial constitution and be pre-approved for a mortgage:
- Proof of Income: Buyers need to ensure they can present their W-2 wage statements from the last two years as their proof of income. Alternatively, your most recent tax returns or proof of additional income—like bonuses or alimony—are also sufficient.
- Proof of Assets: It’s essential for buyers to be able to prove that they have the necessary funds to cover the down payment as well as the closing costs. Bank statements, investment account statements, or cash reserves are usually sufficient.
- Good Credit: Most lenders will require a FICO score of 620 or higher for conventional loans. The higher your credit score, the lower the interest rate—most lenders tend to save the lowest interest rates for those with a credit score of 760 or more. However, if your score is relatively low, we can suggest ways for you to improve.
- Employee Verification: Stable employment is often a necessary requirement for getting pre-approved. Employment verification will involve reaching out to your employee for confirmation. Self-employed buyers will need to provide paperwork in regards to their business and income.
- Others: Some other documents that lenders will require include a copy of your driver’s license as well as your social security number and signature. This is so they can pull up and review your credit report.
Your Next Steps
Once you get a better understanding of the type of loans you qualify for, you can narrow your search to homes that fit your criteria and simplify the process. However, finding the perfect home might still be difficult without assistance.
At Thrive Lending Group, we understand how complex and overwhelming the home buying process can be to first-time buyers. That’s why we’re committed to offering our clients our experienced support. Our team of seasoned mortgage experts can offer advice on making sound offers and come up with effective strategies based on the current market conditions. We’ll help you get a competitive advantage and score your dream home by educating you on the latest trends in the industry.