Why Getting Pre-Approved Helps You as a Homebuyer

If you are starting your home search seriously, consider getting pre-approved for a home loan. Although this step requires some work upfront, it can make the buying process faster and smoother.

What Does Pre-Approval Mean?

Getting pre-approval means your lender has reviewed your financial information and set a maximum loan amount you can borrow. They will approve your loan as long as your financial situation does not change.

In addition, pre-approval benefits you as a buyer; it does not tie you to a specific home. You still need to provide additional documents and complete the full home buying process to get official approval. This process includes verifying your income, checking your expenses, and ensuring the home meets the lender’s requirements.

What Documents Do You Need?

Your lender will give you a list of documents to submit for pre-approval. Common requirements include:

• Proof of Income: Provide W-2 forms, tax returns, or self-employment income statements. Lenders use this to confirm you can afford the home.

• Employment Verification: Show that you have a stable job and expect to remain employed. Self-employed buyers may need to provide extra documentation.

• Proof of Identification: Provide a driver’s license or other photo ID, along with your Social Security number so the lender can check your credit.

• List of Assets: Share bank statements to show you have enough money for a down payment and cash reserves.

• Credit Check: Lenders check your credit score early to identify any issues and confirm that you qualify for a loan.