Our 4-Step Checklist For Securing a Mortgage Preapproval

Getting a mortgage preapproval from a lender signifies their approval for a specific loan. It means that the mortgage lender has evaluated the prospective home buyer’s credit history, income, assets, and other financial information and determined how much the buyer can borrow. Mortgage preapprovals are typically valid for 60–90 days and give home buyers the confidence to begin shopping for a home.

It’s crucial to note that if you are looking to buy a home through a mortgage loan, you should get preapproved before looking at properties. Having a preapproval means knowing how much you can borrow and what interest rate you will qualify for, which can help you narrow down the homes you can purchase and make the home-buying process easier.

Additionally, with the number of buyers outnumbering the number of properties in the market, no seller will wait around while you get a mortgage loan approved.

4 Step Checklist For Securing a Mortgage Preapproval

Here are four things to remember about securing a mortgage preapproval for a smoother home-buying process:

1. Gather the Necessary Documents. The documents you’ll need to provide for a mortgage preapproval include your tax returns, pay stubs, and bank statements. Your tax returns provide information about your income and financial situation, while your pay stubs offer insight into your current employment and income. Meanwhile, your bank statements provide information about your existing financial assets and liabilities.
2. Check Your Credit Score. When you apply for preapproval, mortgage lenders will usually pull your credit score to assess your eligibility and determine the loan amount and terms you qualify for. A higher credit score shows that you are a responsible borrower, and it can give lenders more confidence in lending you money. Meanwhile, a lower credit score may indicate that you are a riskier borrower, and it can limit the loan amount and terms available to you. To increase your chances of being preapproved, it’s essential to check your credit score and make sure it’s accurate. You can secure a free copy of your credit report annually from each of the three major credit bureaus (Equifax, Experian, and TransUnion). It’s also a good idea to monitor your credit score regularly to ensure no errors or mistakes could affect your preapproval.
3. Understand Your Budget. A mortgage preapproval gives you an accurate picture of how much you can borrow and can help you narrow your search and ensure you’re looking for homes within your budget. But before you apply for preapproval, it’s essential to understand your budget and how much you can afford to spend. The first step in determining your budget is how much you can comfortably set aside monthly on a mortgage. You can look at your current financial situation, including your income, debts, and other financial obligations. Knowing your monthly income and expenses will help determine how much disposable income you have to spend on a loan. It’s best to consider the types of expenses associated with homeownership, such as property taxes, insurance, and maintenance costs. In addition, you should factor in any closing costs or fees associated with the loan.
4. Shop Around. It’s essential to compare offers from different lenders to get the best deal. Once you have determined your budget, you should shop for the best mortgage rates and terms. Comparing lenders and loan products can help you find the best deal for your situation. It’s essential to consider factors such as the interest rate, fees, and loan terms when comparing offers. Don’t forget to look at other factors, such as customer service and the lender’s reputation.

Conclusion

Securing a mortgage preapproval is an essential step in the home-buying process. It can help you budget and save money, and it can also help you narrow down your options and find the best deal. By researching lenders, comparing offers, and understanding your budget, you can find the right mortgage preapproval for your needs.

Call Your Mortgage Specialist Today!

Buying a house for the first time? Let MidAmerica Bancorp, Inc. help you. We provide the ideal home loans to help you achieve the American dream. MidAmerica Bancorp, Inc. is licensed in Illinois, Indiana, Florida, Michigan or Wisconsin. Contact us today at (708) 237-4050 to learn more.