Before you spend every Sunday at open houses on top of countless hours at your computer sifting through hundreds of homes in the area, talk to your lender about the mortgage pre-approval process. Getting pre-approved for a mortgage should be the first step in your house hunt. Learn why a mortgage pre-approval is an important part of the process.
Mortgage pre-approval is the process of a lender examining all of your finances to determine if you are financially able to buy a home, and if you are, how much you can afford. Many lenders then issue a pre-approval letter, which you can present to sellers as proof of your ability to buy. This is a key thing to have for two reasons:
Your mortgage pre-approval also saves time. Working through the approval itself takes a little time, so if you don't have to wait for the paperwork to be processed after the offer is made, you may be able to close faster. This can also make you a very attractive buyer.
To get the mortgage pre-approval process started, contact a bank or lending institution, and ask about their mortgage pre-approval requirements. These will vary, but in general, you'll have to produce:
The lender will also pull your credit report and may ask you for other pertinent financial data.
Once you've turned over all of this information and discussed your budget and borrowing goals, the lender will assess your documentation as well as the current housing market to determine your borrowing eligibility. This process can take days or a couple weeks, depending on your circumstances. Once you have your mortgage pre-approval letter, it is usually valid for 60-90 days.
It's important to note that a mortgage pre-approval is not the same thing as pre-qualification. Pre-qualification is a much looser estimate of how much you could spend on a home because it's generally based on a quick phone call where you provide financial estimates. For this reason, it's not regarded as highly as a pre-approval.
You can get started on a mortgage pre-approval with Citizens Bank in just minutes. Call 1-888-514-2300 to speak with a home loan originator and find out more about the pre-approval process. Once you've got your pre-approval letter, it's time to start pounding the pavement and searching for your next house.