Pre-Approved For A Mortgage: How To Get It Right

One of the key questions every first time home buyer always ask is “How exactly can I get pre-approved for a mortgage?”

Honestly, getting pre-approved for a mortgage is easy – if you know what it takes!

How to get pre-approved for a mortgage

This article will help you put the right foot forward on what you need to get pre-approved for a mortgage.

Let’s dive in!

Find a lender or a mortgage broker

First, you have to find a mortgage broker or lender.

If you have a friend, loved one or even a family member who purchased a home recently, you can ask about the lender that helped them out and if they can recommend that lender too.

First, you have to find a mortgage broker or lender.

If you have a friend, loved one or even a family member who purchased a home recently, you can ask about the lender that helped them out and if they can recommend that lender too.

Also, if you already have a relationship with a bank, or a credit union, that can be a great place to start.

If you decide to go with a mortgage broker, you’ll get the chance to review several lenders that the broker works with.

That’s one advantage you shouldn’t overlook.

Once you’ve decided to work with one or more lenders, then you should be set to tender a pre-approval application.

You can start the pre-approval process on the internet or you can visit your lender’s office.

You will be required to complete an application form about the type of loan you want, your income and several other key details that will enable the lender to make a rational decision.

Once the lender is done reviewing your application they will let you know how much you’re eligible for, which they are willing to lend you.

Many mortgage firms have a pre-approval form on their websites.

For instance, the Bank of America, and Wells Fargo have online application forms on their websites.

Similarly, most state and local lenders have the form on their websites too. This is one easy and quick method to start your pre-approval process.

If you decide to start the pre-approval application online, you will be required to provide some documents to support your claims.

You have the options of either faxing the documents, delivering them personally or sending them via FedEx. So what documents will you need?

Documents you need to get pre-approved for a mortgage

The list of documents you need to be pre-approved for a mortgage depends on the lender you’re applying with.

Typically, many lenders request for some or all of these documents:

Can you start the pre-approval process online?

Sure! You can submit your mortgage pre-approval form online.

However, you might be required to update your application by sending the required documents.  

Many lenders use the online application just to get you started.

While the process is convenient for you, it is also an effective lead generation method for lenders.

As soon as you complete the form and click on the “submit” icon, one of the lender’s broker or loan officer will contact you within few hours.

They will request for more information via email or phone.

Applying online is an easy and convenient way to get your application on the right track right from the comfort of your home.   

Why you need a mortgage pre-approval letter

Once you’re pre-approved for a loan, real estate agents will be more inclined to work with you and sellers will be more willing to consider your offer as a realistic one.

This is why including a copy of your pre-approval letter with your buying offer is such a great idea when you’re house hunting.  

This is considered a good practice as it clears the doubts of sellers about your ability to afford the amount you’re offering.

So what does a mortgage pre-approval letter contain?

The letter clearly states that you’ve screened by a mortgage lender and you’ve met their basic requirements for approval.

This simply means you’re not house hunting for the fun of it. Rather, you’re a serious buyer!

Assuming you’re the seller who is considering several potential buyers. Wouldn’t you prefer having one with a pre-approval letter?

Is the online application for a mortgage pre-approval free?

Depending on the lender you choose, the application may be free or you might be asked to pay for it.

Some lenders waive the fee in order to attract more customers while others add the fee into your closing costs and you’re requested to pay when you close the loan.

An easy way to find out if the fee is free or not is to ask before submitting your application.

If the lender is requesting for a fee, ask if it’s refundable. Some mortgage lenders request for a non-refundable fee for their services.

They request this fee when you’re ready to submit your application documents.

In most cases, the cost for a mortgage pre-approval application fee is between $300 and $400.

In this case, the term “non-refundable” means you’ll forfeit your application fee if you decide to walk away.

However, some lenders provide free mortgage pre-approval services as a part of their marketing strategy.

Bottom line!

So what exactly is mortgage pre-approval?

It is the process where you authorize a lender to assess your financial background (debts, income, credit score etc.) in order to figure out if you’re eligible for a loan or not.

Based on the outcome of that assessment, the lender will be able to determine how much they are willing to lend you.

There are several reasons why you should consider being pre-approved for a loan.

Pre-approval makes it easier for you to find a reputable real estate agent who is willing to work with you.

Pre-approval also helps you figure out any financial problems that you need to fix.

If your credit score is extremely low, or your debt is piling up badly, you’ll find out easily during a mortgage pre-approval.

Most importantly, sellers will see you as a serious buyer and they will be more inclined to accept your home buying offer.

Williams Oleije

Williams Oleije

Williams Oleije is an Inbound Marketer, and a pop culture enthusiast. He's an avid researcher about how digital media is transforming marketing in several industries.

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