What you Need to Know about Mortgage Preapprovals
Mortgages
If you are a buyer in today’s market, you will definitely want to learn about the mortgage preapproval process, as you will likely need one before you even begin searching for homes.
Most real estate agents and sellers want to see a mortgage preapproval even before you submit an offer on a St. Augustine property.
A letter of preapproval from a lender basically verifies that you have been approved for a mortgage of a certain dollar amount. It takes the guesswork out of deciding how much a buyer can afford, and it eliminates the need to waste time looking at houses that don’t fit the buyer’s price range. In other words, it saves everyone involved a lot of time and hassle.
The bottom line is that a seller wants to know that they can seal the deal with a buyer. And if the buyer comes to them with an offer – regardless of how great the offer is – without a mortgage preapproval in their back pocket, the seller will likely send them packing.
So, now that you’ve learned the importance of a mortgage preapproval, here are the steps you’ll want to take to get one:
- Don’t look for a lender the day before you plan on making an offer. Instead, plan ahead and get your preapproval letter signed, sealed and delivered before you even begin looking at St. Augustine properties. Getting your preapproval letter taken care of earlier than later is also advantageous, as it affords you the opportunity to search for the lender with the best loan terms to fit your budget.
- Be prepared for your lender meeting by assembling your financial documents. A lender will likely ask you for a number of financial documents when you apply for a mortgage preapproval, so it’s important to gather together all of your documents beforehand so you don’t have to rush around in a panic the day before your meeting. Although each lender will request different documents, plan on supplying the lender with: W2 statements for the last, two years; federal income tax returns for the last, two years; bank statements for the last year; recent pay stubs; and any investment income documents.
- Take your time – but not too much time. Although it is always a good idea to take your time when it comes to house hunting, it is also important to understand that preapproval letters are only valid for a set number of days. Although your mortgage preapproval letter’s expiration date will vary by lender, most fall into the time frame of 60 to 90 days.
Date: 2009-09-02 13:02:00
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