It is important to meet and discuss getting a pre-approved loan with your realtor, broker or real estate agent before applying for a pre-approved loan. The agent will have information about lenders that offer competitive and fair programs, they will share information about current rates, terms and they will be able to guide you in your selection of lenders. The agents are familiar with knowing the best lenders and will know which lenders stand by their terms. You can obtain referrals for lenders from your friends and acquaintances and share those with your real estate agent also. You should always contact more than one lender in order to find the best program that will fit your need.
Once you have selected a lender and filled out the required applications, your finances and credit report will be reviewed. The more information that you can provide to the lender, the better they can present their offers to you. It is possible that you may qualify for a first-time home buyer loan, a state financed mortgage plan with low interest rates or you may qualify for little or no money down. There are many types of loan offers and your lender will find the best one to suit your need.
Some lenders may charge a fee but some may not. Most good lenders will not charge a fee for pre-approvals. The process may take up to three weeks and should last in effect for several months before you will need to qualify again. Getting pre-approved is best done before starting your home or property selection.
When submitting your requests for pre-approval, you will need to have a few documents ready. Some of these may include recent W-2 forms, self employment statement earnings, recent pay stubs, tax returns, bank account statements and you will need to fill out the application forms from the lender also.
Once you are pre-approved, you will get a pre -approval letter from the lender. This letter will document details about the loan that you qualify for and will be based on your own information that you supply to them. This letter gives opportunity to preview homes that are most suited to your needs and finances. This offer can be modified after your information has been verified and is an estimate only.
Your letter should include to a potential home buyer a specific loan amount, monthly payments that that person can afford, and closing cost information. This letter will be given to your realtor or real estate agent.