Sellers are asking these financial questions
Get the scoop
Do you want content like this delivered to your inbox?
Share



Share

Requirements for Pre-approval

Donna Story

Real Estate was the perfect choice for Donna because she loves working with people.  Her involvement in the community and industry knowledge help...

Real Estate was the perfect choice for Donna because she loves working with people.  Her involvement in the community and industry knowledge help...

May 1 3 minutes read

Shopping for a home may be exciting and fun, but serious homebuyers need to start the process in a lender's office, not at an open house. Most sellers expect buyers to have a pre-approval letter and will be more willing to negotiate with those who prove that they can obtain financing.

Potential buyers need five essential things—proof of assets and income, good credit, employment verification, and other documentation—to be pre-approved for a mortgage.

1. Proof of Income

Buyers generally must produce W-2 wage statements from the past two years, recent pay stubs that show income as well as year-to-date income, proof of any additional income such as alimony or bonuses, and the two most recent years' tax returns.

2. Proof of Assets

The borrower needs bank statements and investment account statements to prove that they have funds for the down payment and closing costs, as well as cash reserves.

3. Good Credit

Most lenders require a FICO score of 620 or higher to approve a conventional loan, and some even require that score for a Federal Housing Administration loan. Lenders typically reserve the lowest interest rates for customers with a credit score of 760 or higher. FHA guidelines allow approved borrowers with a score of 580 or higher to pay as little as 3.5% down.

If you’re selling your home soon, staging is something you need to consider.

Depending on the current state of your home, some of these options may be better suited for you. Ask a trusted friend for their thoughts on which path you should take. And just remember, we’re here to help too.

4. Employment Verification

Lenders want to make sure they lend only to borrowers with stable employment. A lender will not only want to see a buyer's pay stubs but also will likely call the employer to verify employment and salary. A lender may want to contact the previous employer if a buyer recently changed jobs.

5. Other Documentation

The lender will need to copy the borrower's driver's license and will need the borrower's Social Security number and signature, allowing the lender to pull a credit report. Be prepared at the pre-approval session and later to provide (as quickly as possible) any additional paperwork requested by the lender.

Consulting with a lender before the homebuying process can save a lot of heartache later. Gather paperwork before the pre-approval appointment, and definitely before you go house hunting.

We love what we do.

Our Team specializes in local home buying and selling. We effectively coordinate the purchase and sale of real estate, properties, residential homes, town-homes, condos, new construction, and land, based on our clients’ needs.

500+

Homes Sold

100%

Client Focused

$100M+

Sales

35+

Years Experience

We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies. More info