Here at The Lending Group, I want to talk about why a pre-approval letter is so important and needed before starting the process of obtaining a loan for a new house. Some of you may wonder what significance this has, or why it's important. Basically, it gives the seller reassurance that as a potential buyer, you've been approved for financing by trusted lenders and are able to afford their property without any issues at closing time. Trust that this is something you really want to do before even beginning your search. In three easy steps, we’ll go over the pre-approval process and the reasons why you should never skip them when researching mortgage loans. Refinancing? Stay tuned – these tips benefit you as well!
Start With an Application
Step number one is completing an application, which is simple here at The Lending Group. We use our own pre-qualification lending portal, which we send virtually out to homeowners. From there, they can input their information such as name, phone number, address etc. We can then review your credit using this information alone. All data is collected electronically, so it’s easy to get done when you find the time. The real estate market can be pretty tricky to navigate alone, so any way we can make the process smoother and stress-free, the better.
Gather Your Financial Information
The second step is uploading the necessary documents for a review. Those documents will include your pay stubs, your w-2s, maybe your bank statements in some cases. If you own other properties, it could include your current mortgage and property insurance as well. It’s all basic information that allows us as a lender, to review your files and make sure you're financially able to purchase a home.
The underwriting process belongs to the final step, number three. This is where we will combine the application and your income into our in-house automated underwriting engine, which allows us to give you a score as a potential home buyer. This final step will tell us how much you can realistically afford to spend, based on your financial documents, as well as several other important factors.
Always Use a Local Lender
Most of the time, the pre-approval letter can be issued within 24 to 48 hours.
It is extremely useful when you're going to shop for your home, specifically in today's market, when there are multiple offers on most properties. Sellers want to make sure they know that you've been pre-approved, and that you're qualified. A lot of times,
sellers and their agents are looking for a local lender’s name on that pre-approval letter. For that reason, using someone that is knowledgeable, that's been lending in the industry for quite some time, and that is also local to your market, is highly recommended.
If you have any questions, or if you would like to take the next step in getting pre-approval for the purchase of your home, please contact me.