Getting Pre-Approved for the First Time Home Buyer

One of the most integral parts in the home buying process if you are a first time home buyer is getting pre-approved for a mortgage. A pre-approval letter for a mortgage can viewed as a promise on a mortgage from a lender to a prospective home buyer. The home buying process can be a confusing and lengthy process if you are a first time home buyer. Knowing what it takes to be pre-approved and the benefits that follow can help you find the right house quicker, while minimizing your anxiety while finding it.
In order to get pre-approval a lender will typically ask you for various financial documents. These documents may include your last two W2 forms, recent pay stubs, federal tax returns from the last two years and bank statements from the previous three months. Lenders will then take the information from your loan application and couple it with youremployment history and credit report to come up with an offer that best suits you.
Don’t be fooled, a pre-approval and pre-qualification are completely different, and this misconception can cost you valuable time down the road. Pre-qualification can be viewed as the first step towards pre-approval but this is only a preliminary step. Pre-qualification is not as involved as the pre-approval process and only gives you a rough estimate of the mortgage you may qualify for. It does not give you that valuable promise of a mortgage once you have found your dream home.
Before you even begin looking for your home, make sure you have the right pre-approval for a mortgage. Don’t be afraid to shop around between different lenders, remember that nothing is final; a pre-approval letter does not bind you in a contract. Make sure that the pre-approval letter for the mortgage you do intend on taking makes sense for you situation. How long do you plan on living in your new home? Will your salary be rising in the upcoming years? These are just some of the questions you should ask yourself before deciding on a pre-approval for a mortgage.
Once you have found the right pre-approval for your situation you can narrow your home search down to what you now know is affordable. This allows you to spend more time on homes you know you can buy and ditch the ones that are unrealistic, saving you time and anxiety.
Being pre-approved also makes yourself more marketable; sellers will be more willing to accept your offer even if it’s lower than what they were looking for because you have the pre-approval letter to back you up. Just remember that these pre-approval letters don’t last forever. Most pre-approval letters have an expiration date of about 90 days.
Buying a house can be a hectic and sometimes lengthy process. As a first time home buyer knowing the pre-approval process and obtaining the promise for a future mortgage will help cut both time and anxiety out of finding your dream home.
The preceding information has been provided by the White Picket Fence Home Buying Institute. For further information regarding pre-approvals and home buying, go to Contact Us at http://bit.ly/njwhitepicketfence.