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Getting pre-approved will help you know what you can afford before you start looking for a house and close your loan faster. You can get preapproved online in minutes with Rocket Mortgage®, or you can get preapproved by calling a Home Loan Expert at () Here’s an overview of what you’ll need to provide no matter which way. Mortgage pre-approval is an evaluation by a lender that determines if you would qualify for a home loan. It also shows how much the lender would be willing to lend you. Getting pre-approved is the first step towards getting a mortgage, but it does not guarantee a loan. A mortgage pre-approval is a written statement from a lender that signifies a home-buyers qualification for a specific home loan. Income, credit score, and debt are just some of the factors that go into the pre-approval process.
What is a mortgage preapproval and why does it matter?
Lenders will often work with borrowers with a low or moderately low credit score and suggest ways they can improve their score. Your lender will not only want to see your pay stubs, but is also likely to call your employer to verify that you are still employed and to check on your salary. If you have recently changed jobs, a lender may want to contact your previous employer. Lenders today want to make sure they are loaning only to borrowers with stable employment.
Self-employed borrowers will need to provide significant additional paperwork concerning their business and income. Your lender will need to copy your driver's license and will need your Social Security number and your 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. The more cooperative you are, the smoother the mortgage process will be.
Once you have gathered all the required documentation, it is time to look and apply for the best mortgage rates in your area. Consulting with a lender before you start the home buying process can save a lot of heartache later, so gather your paperwork or print some recent statements off your online bank accounts before your pre-approval appointment and before you begin house hunting.
Pre-approval A mortgage pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but a pre-approval is much more valuable because this means the lender has actually checked your credit and verified your documentation to approve a specific loan amount usually for a particular time period such as 90 days.
Proof of Income "No verification" or "no documentation" loans are a thing of the past, so all borrowers need to be prepared with W-2 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 your two most recent years of tax returns.
Proof of Assets You will need to present bank statements and investment account statements to prove that you have funds for the down payment and closing costs , as well as cash reserves. Good Credit Most lenders today reserve the lowest interest rates for customers with a credit score of or above. Employment Verification Your lender will not only want to see your pay stubs, but is also likely to call your employer to verify that you are still employed and to check on your salary.
Documentation Your lender will need to copy your driver's license and will need your Social Security number and your signature allowing the lender to pull a credit report. The Bottom Line Consulting with a lender before you start the home buying process can save a lot of heartache later, so gather your paperwork or print some recent statements off your online bank accounts before your pre-approval appointment and before you begin house hunting.
Looking at the Annual Percentage Rate APR is the best way to compare lenders because it shows you the total cost of a loan. You can also ask for a recommendation from your family, friends or real estate agent. Or, you can visit your local bank branch, credit union, savings institution or mortgage company. See our current mortgage interest rates and use our mortgage calculator to estimate your monthly payment and closing costs. Being prequalified or conditionally approved for a mortgage is the best way to know how much you can borrow.
A prequalification gives you an estimate of how much you can borrow based on your income, employment, credit and bank account information. Please review its terms, privacy and security policies to see how they apply to you. Skip to main content Please update your browser. Begin Site Message Content. Interest rate video Opens Overlay. Learn the difference between the annual percentage rate APR and the interest rate.
What can you afford? How much home can you afford? Take the first step and get prequalified. Call a Home Lending Advisor.