Because of the low-interest rates on home mortgages, houses are flying off the market very quickly. It is a seller’s market, which means homebuyers must be competitive. Homebuyers may have to look for months and make several offers before one gets accepted.
One way to ensure you can move quickly through the homebuying process is to get preapproved for a mortgage. At First Fidelis LLC, we want to share with you the reasons why you should get preapproved for a home loan, as well as the steps to take to get preapproved.
What Is Mortgage Preapproval?
Getting preapproval for a mortgage means that a homebuyer meets with a lender to determine the amount of loan for which they will qualify prior to starting the homebuying process. For most people, it is the first step in the process. The lender will evaluate your financial history, including your credit score, credit report, and proof of income.
When a lender preapproves you, they will give you a letter, which you can take to the seller when you make an offer on a home. The letter will indicate to the seller that you have talked with a lender, and the lender is willing to work with you on financing the property
Why Should You Get Preapproved for a Home Loan?
There are many reasons to get home loan preapproval before beginning your house search. First and most important, it narrows down a price range for what home you can afford based on monthly mortgages, your income, and the amount of your down payment. This will give you more confidence as you look for your future home.
Second, many real estate agents prefer to work with home buyers who have been preapproved. A preapproval will let the lender know that you are a serious buyer and that they are not wasting their time showing you houses above your price range.
When you meet with a lender to get preapproved, you may also find that there are issues in your financial history that may affect the home buying process. Uncovering these problems before you begin looking for a home allows you to fix any problems and pay down debt, while also not wasting your time searching for a house to buy before you are ready.
Finally, being preapproved can help you make quick judgments. You won’t have to wait for a loan approval to come in while you are trying to purchase a house in a competitive market, which could cause you to lose the house you really want. By getting preapproved, you can confidently place on offer on a house as soon as you are ready to pull the trigger.
How to Get Preapproved for a Home Loan
When you meet with a lender to get preapproved for a mortgage, there are various things you will need to bring with you to your appointment. First, you’ll need several forms of identification, such as your driver’s license or passport, social security card, or green card.
You’ll also need proof of income, including recent pay stubs covering the last 60 days, W-2 forms from the last two years, proof of any additional income. Other financial documents you’ll need include:
- Bank statements to prove you have enough money to cover the down payment
- Quarterly statements for any stock accounts, IRAs, or mutual funds
- Two years of personal and business federal tax returns
- Documentation of debt or liabilities you owe
- Proof of any other assets you own
For some homebuyers, the preapproval process is quick, and you’ll be approved the same day. However, large amounts of debt, low credit score, or a history of foreclosures can slow down the process.
Getting Preapproved at First Fidelis
At First Fidelis LLC, we can help you get preapproved for a mortgage before you start the search for your future home. Contact us today at 913-205-9978 to schedule an appointment. You can also fill out our online preapproval application to get the process started right away.
We are operating with COVID-19 in mind; we can accept all documents virtually. There are no required in-person meetings, so you can rest assured that you are as safe as possible during the preapproval process. Our goal is to help put you in a home in the Kansas City area while keeping you safe.