First, you’ll be asked to fill out an application with a lender. The lender will gather a variety of background information regarding your income, employment status, and tax forms. Specific documents you may be asked to submit to a lender for preapproval include:
- W-2 statements, or 1099s, for the last two years
- Copies of your most recent bank statements for all accounts including checking, savings, etc.
- Recent paystubs from your job and proof of any other income you may have
- Proof of assets such as IRAs, stocks, bonds, or mutual funds
- Some lenders require an application fee – be sure to ask!
Once you complete the process, you’ll receive a preapproval letter that includes details such as the interest rate, type of loan, closing costs, and your estimated monthly payment. This letter is a non-binding, good faith estimate (and it’s time-sensitive, usually good for about 60-90 days). Keep in mind that being pre-approved does not guarantee that a lender will give you the loan – it simply means than if nothing in your financial situation changes, you’re likely to get a loan. When the seller accepts your offer on a home, the lender that has preapproved you will then formally approve your loan.
- Better Homes & Gardens Rand RealtyAssociate Broker, present
Better Homes and Gardens Rand Realty
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