With home inventory slim in many areas of the country, home buyers face plenty of competition! A mortgage pre-approval can make the difference between getting your purchase offer accepted, or having the seller choose another offer by a better-prepared buyer.

A mortgage pre-approval means a lender has verified your creditworthiness for a certain loan amount during a fixed timeframe. A mortgage pre-approval considers your income, employment, credit history, debts and overall ability to afford a home.

Once your lender has determined your mortgage eligibility, you’ll be issued a pre-approval letter. Copies of this letter can be supplied with your home purchase offer, which proves to the seller that you are financially capable of closing the deal!

To get started on your mortgage pre-approval, you will need to supply several pieces of information to your lender. The exact documentation may vary by lender, loan amount, type of mortgage and your financial history. Generally, you should have the following documentation in hand:

*  Copies of W-2 forms for the last 2 years

*  Copies of paycheck stubs and direct deposit transmittals for the past 30 days

*  Your last 2 years of Federal income tax returns

*  If self-employed, copies of 1099 forms, and profit and loss statements

*  Copies of last 2 months of bank statements for checking and savings accounts

*  Copies of last 2 months of bank statements for investment and/or retirement accounts

*  Copies of canceled checks proving rent payments for past 2-3 months

*  List of monthly debt payments and outstanding balances

If you receive child support or alimony payments, you do not need to show proof of this income unless you want it calculated in your mortgage pre-approval.

On the other hand, if you are paying child support or alimony, this must be disclosed as a financial obligation, along with any other debt payments you make on a regular basis.

Your lender will pull a copy of your credit report and verify your IRS filings. Your income, employment history and bank accounts will be verified. While much of the process is performed electronically, the quality of information that you bring to the table affects the speed and accuracy of your pre-approval.

Discrepancies cause questions and delays, so be sure to supply all pages of statements, even if they are intentionally left blank by the issuer. Do not blot out any information on your documentation, nor make notes directly on any of the pages. Your lender will give you an opportunity to explain any concerns.

While paperwork can seem cumbersome, it pays to organize your financial picture before applying for your pre-approval! You’ll get better service and faster results!

Your Exclusive Buyer Agent can refer you local, trustworthy lenders who can guide you through your pre-approval and your mortgage options! Find an EBA in your area today!

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