After finding a REALTOR®, being pre-approved for a mortgage is one of the most critical steps potential homebuyers should complete. This is essentially an assurance from a lender that the buyer is qualified to borrow up to a specific amount of money at a particular interest rate. It makes the buyer look more serious to sellers and, in a competitive market, can make a buyer stand out among a multitude of offers.
Buyers will need to collect at least two years of tax returns, several months of pay stubs and bank statements, as well documents that show any additional sources of income, like social security payments or alimony. Buyers should also check their credit report to make sure everything is accurate and take steps to correct any errors, as that could affect their interest rate or if they can even qualify for a mortgage.
Speak with someone in your community in the process of buying a home about his or her experience going through the pre-approval processes. Talk with lenders about what they wish buyers knew going into the process to be better prepared. Ask REALTORS® about what advice they give their clients about getting pre-approved.