The first step in the home buying process is to meet with a lender and get yourself pre-approved. A Pre-Approval is a statement from a lender showing that they have reviewed your credit score and financials and are pre-approving you to buy a home up to a certain dollar point. It not only lets you know how much you can afford when it comes to buying a home, but it also gives the seller confidence that you are well qualified when you find the right home and make an offer. So let’s talk about what you should be doing in order to get that pre-approval letter in your hand.

Prepare Your Credit

Your Credit Score will be a huge factor in what you can afford when it comes to your new home. If your credit score is high, congratulations, you are in great shape! However, if your credit score could use a little help, it’s best to clean it up as much as possible prior to sitting down with a lender. Double check there are no collection issues, and consult with a credit counselor if you need help. A minimum credit score of 580 is required for an FHA loan with 3.5% down. A lower credit score will require a down payment of at least 10%.

Find a Lender

• Reasonable Dates. Beyond just the closing date, you want to make sure the other dates are are reasonably short. Why, you may ask? If the buyer asks for an exceptional long inspection period and then decides at the final hour that the home inspection does not meet their expectations then you have wasted an awfully long amount of time off the market. You want to get it back on the market quickly if there is an issue.

Gather Your Documents

While you might be able to receive a pre-qualification on the phone with a lender in just a few minutes, a pre-approval is what you are really after. This will require you to provide some documentation to your lender. Considering having these items with you:

• Social Security Number for all borrowers who will be listed on the loan

• Proof of Employment

• Proof of Income (usually your two most recent pay stubs)

• Your W-2 Statements and Tax Returns for the last two years

• Self-Employment Documents

• Bank Account Statements

• Place of Residence (typically for the last five years)

• Gift Letters (if someone is gifting you funds for the down payment)

• Your Credit History and Score (to be pulled by the Lender)

Get Preapproved and Start Shopping

Once you have your pre-approval letter in hand, you will be ready to start shopping for your new home. But don’t wait until this moment to call me. Let’s start chatting now, and I can even help you through the process of getting pre-approved!