Getting a pre-approval
You’ve spent countless hours on Zillow, Pinterest, and watching HGTV and you think you know what it is you want, but you’re not entirely sure how to get it. You determine you need a loan, but you’ve never taken out a loan of this magnitude. You fear rejection, you fear being under prepared for the conversation with a loan officer. Good news! The bank wants to loan you money! That’s how banks work; they make money on funds they loan out and they need homebuyers just as much as homebuyers need them. The power dynamic is a lot more balanced than most people realize, and a little preparation will only help you achieve your real estate goals faster. I’ve put together a list of some things you can do now to get started to make your first meeting with a potential lender a breeze.
Universal Loan Application - Form 1003
Per federal guidelines, an initial 1003 is “complete” when the lender obtains the following 6 pieces of information. When the lender has this information, they are required to send a Loan Estimate to the borrower within 3 business days. You can review this application prior to contacting a mortgage lender, so that you know what to expect. Mortgage Application.
Name
Social Security Number
Income
The Subject Property Address
An estimate of the value of the property
The desired loan amount
With the information provided your lender will be able to issue pre-approval. They use the information you give them to do an evaluation of your income, credit and debt payments to determine a loan amount that you are pre-approved to obtain. This information will require further documentation in the underwriting process so it is important to be as accurate as possible on your application. If your compensation has a large commission component or you are self-employed, be sure to speak with your loan officer about the nature of your income.
Underwriting Information
If you want to prepare even further, here are a few additional documents that will be needed during underwriting, after you are pre-approved:
A copy of your driver’s license / photo ID
2 most recent paystubs
2 most recent year W-2s
2 most recent month bank statements (to show the origin of funds for down payment & closing costs)