How to Get Pre-Approved for Your First Home Purchase

Do not skip a home inspection when purchasing a new house. Photo from © bloomua – Fotolia.com

Your first home purchase can be both an exciting and a daunting experience. In addition to the physical task of house hunting, there is the paperwork, waiting and stress involved in getting the mortgage loan. You can simplify this process profoundly by getting pre-approved for your home loan; in fact, most sellers today prefer that you have a pre-approval letter from the bank before ever making your offer.

Pre-Qualified vs. Pre-Approved

Many people interchange the words “pre-qualified” and “pre-approved,” but they are not the same thing. Pre-qualification is primarily for your benefit; the lender or mortgage broker simply asks you a few questions about your income, expenses, debt and expected down payment to give you a ballpark figure of how much home you can afford. With pre-approval, you actually begin the process of applying for the loan. The lender asks you to fill out paperwork, provide proof of income and agree to a credit check, then you will be provided with a pre-approval letter stating that the bank tentatively agrees to lend you money up to a certain amount.

Pre-approval is not a guarantee of a loan, but it does give you a solid price range to work in, and it tells sellers that you and the bank are serious. Furthermore, it streamlines your loan processing once you make an offer, since the initial steps have already been taken.

Tips for Getting Pre-Approved

To improve your chances for pre-approval, as well as qualify for as much home as possible, consider the following:

Check your own credit before applying

The law entitles you to one free credit check from each of the three major bureaus each year. Look at your reports, identify and correct any errors. If your credit score is low, you might not qualify for as large a mortgage as you would like, or you may be subject to higher interest rates. Pay off some debt to boost your credit score.

Save a down payment

There are many incentives for first-time home buyers to purchase with a low down payment or get down payment assistance, but the bottom line is you’ll qualify for a higher loan if you bring more money to the table.

Get your paperwork in order

For starters, you should gather several months of pay stubs from an employer (or income/expense reports if you are self-employed) at least a year’s worth of bank statements and tax returns from the past two-three years. It’s imperative to have this information available when you try to pre-qualify. Having the necessary documents in order ahead of time will speed up the process.

Your first home purchase can be very exciting, and getting pre-approved for your first home purchase can take a lot of the stress out of the process. When you are ready to start looking, call Atlanta Fine Homes Sotheby’s International Realty at 404.9

By Ashley Morris | Posted

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