When you are pre-approved for a mortgage, sellers know that you are serious.
Mortgage pre-approval can be done in as little as a day. It requires completing a formal application to the lender and submission of all necessary financial and employment documentation.
A good rule of thumb is that your total payment for mortgage, taxes, insurance and assessments should not exceed 28-33% of your gross monthly income.
Things you will need to bring to the mortgage loan originator:
- Thirty days of pay stubs
- Two years of federal tax returns
- Sixty days or a quarterly statement of all asset accounts, including your checking, savings and/or investment accounts
- Two years of W2's
Follow this pre-approval checklist and you'll be in a great position to secure the mortgage you need to buy the house you want...
- Gather your financial data (listed above) including; proof of IRA and/or retirement account balances, social security, child support and/or government assistance.
- If self-employed, include your business' profit & loss report for past two years
- Have your earnest money, down payment and closing funds available in the bank.
- If down payment and closing funds are going to be gifts to you, let your mortgage lender know at the begining of the process.
- If you've been renting, put together the last twelve months of proof (i.e. check copies & money order receipts) showing that you've been on time each month with your rent payments.
- Disclose money held in stock market and other properties already owned.
- Be prepared to disclose past financial issues, like bankruptcy.
- Review your credit score, you can get a free report at annualcreditreport.com.
- Use large pots of flowers or green plants on the porch
- Keep your credit score healthy--do NOT do the following: apply for new credit, take on new debts or make large purchases, cancel any current credit accounts or ask a creditor to lower your limit.