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Home Loans - How to Get Preapproval

Published Thursday, November 20, 2008 by bloggerblognet22596 | E-mail this post

Not only does getting preapproval for a home loan help you narrow your home search, it speeds up the purchase process and can give you some real negotiation room when dealing with a seller. In this article, we'll talk about why getting preapproved for a mortgage is important and how you can do so.

Why Get Preapproval for a Home Loan?

Getting a preapproved loan tells you exactly what kind of home you can afford and your expected monthly costs. You can start house hunting without worrying about calculating finances. You'll know your maximum loan, maximum monthly payment, minimum down payment and that you have a virtual guarantee for a loan.

That preapproval letter can be real heavy artillery to motivate sellers, putting you in a better position to negotiate or win a bidding war.

How Do I Get Preapproved for my Home Loan?

When you apply for a preapproved mortgage, the process is the same as applying for a mortgage. You'll go through the application process with the lender, fill out your application, pay your credit report fee and submit your documentation.

When applying for preapproval, you'll need the following documents:

1. Check or cash to cover the application fee and credit report. If applicable, you may need to cover an origination fee or additional points up front.

2. Social Security numbers for all applicants.

3. List of all income sources.

4. List of all debts, credit cards, bank account numbers, loans, monthly payments and balances.

5. List with two years of employment history, including employer's name, address and contact information.

6. List of addresses for the last two years.

7. If you're self-employed, you'll need to bring in the last two year's income tax returns. Or, if you're newly employed (a recent graduate), you'll need to bring in copies of your W-2 forms.

8. The account numbers and balances for all your checking and savings accounts along with the branch addresses.

9. A clear explanation of any credit problems, and copies of bankruptcy papers, if any.

10. If applying for a VA loan, bring your Certificate of Eligibility.

11. List of all your stocks, bonds and investments, including current market values.

12. List of other assets and real estate.

13. Copy of any divorce or separation papers, along with child support and alimony documents - whether you're paying child support or receiving it.

When you look for a preapproved mortgage, the lender won't be able to actually inspect or appraise the property, so the preapproval will be contingent on both those processes.

For information on practical home ownership preparation recommendations, please visit http://www.home-ownership-preparation.com, a popular site providing great insights concerning home purchase readiness, such as home inspection tools, FHA mortgage rates, and many more!

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