Buying a house should be an exciting time but applying for a home mortgage can be a trying process. Home buyers may already be emotionally stressed from the home-buying process, wanting to move into a new home as soon as possible, when they find out that they still need to obtain a mortgage approval from a lender.
To make this process easier for home buyers, it is a good idea to get a mortgage pre-approval first. It works a bit like a trial run. The lender gets a chance to evaluate the applicants, and the new potential borrowers not only get a chance to see what's involved but also how much mortgage they qualify for, an idea of how much their payments will be and what is required to have their loan approved by the lender. In addition, the pre-approval works to increase the buyer's credibility with real estate agents and home sellers as it shows them that the buyers have the ability to secure a mortgage once they bid on a property. Use the KANETIX mortgage payment calculator to help you get a better sense of your monthly payments to assist with your budgeting needs.
Requirements to get a mortgage pre-approval
The pre-approval process isn't just a meet and greet, however. Applicants will need to bring with them a portfolio of information to allow for an initial evaluation. For most mortgage lenders, an example of what's required includes:
- The type of mortgage desired
- How much down payment (minimum of 5% required)
- Personal information
- The borrowers' list of assets and existing liabilities
- Employment history and income level
- Other income sources
- Employment history
- Credit history
For some mortgage applicants, especially for first time home buyers, the pre-approval process can be a bit of a wake-up call. It helps identifying any problem areas in an applicant's financial history and give home buyers, for example, an idea of how much they need to save before they buy a house or by how much they need to improve their credit score in order to be approved for a mortgage. Additionally, a good idea, before applying for a pre-approval, is to obtain a copy of one's credit report from one of the credit bureaus to have a better idea of where the applicant stands financially. Applicants can also use KANETIX credit score calculator to estimate their credit score.