NOTE: Rob Miller is a lender who cares deeply about his clients and is available when you need him—not when it’s convenient for him! Rob is there for you on weekdays, weeknights and weekends; whenever YOU want to buy a home! He takes great pride in education within his field, and has a special dedication to loan programs for veterans. He shares some great advice on preapproval letters below!
—Randy Lenz, Broker/Owner, NextHome Metro Group
By Rob Miller, MLOP, Providence Home Lending
What is mortgage pre-approval and why is it important?
This is a popular question. The short answer is that pre-approval puts you on the right path to buying your home. Knowing your financial situation and strengths before you go house-hunting and propose offers will get you on your way to success.
Below are a few benefits to getting pre-approved:
- You’re a More Powerful Buyer
Real estate agents and sellers will see you as a serious buyer when you have the backing of a lender. It means a lender has looked at your financial background and says that you’re able to afford a particular house payment.
- You Will Save Time & Effort
House hunting with no direction on what you can afford—the house payment, the taxes—can be a waste of your time. Knowing just how much house you can afford will help ensure you’re looking at houses in your price range. This also means you can focus on things like the features of the home and the location, rather than worry about whether the house is in your price range.
- Reduce Surprises
Talking to a mortgage consultant before you “find the perfect home” can help ensure that you’re not surprised when it’s time to make the offer. Whether it’s a debt-to-income issue or credit report blemishes, getting your ducks in a row early is helpful.
- Better Bargaining Power
With a pre-approval letter, you’ll likely have more negotiating power because sellers know that you’ve already spoken to a lender. They won’t have to wait for you to “talk to the bank” between negotiations.
- Typically Shorter Closing Periods
Pre-approved borrowers have already spoken with a mortgage consultant and given some of their information to the lender. This will most likely speed up the overall approval process. This means the appraisal can be ordered sooner and the process can move forward. That’s good news for everyone involved. An actual mortgage application moves you to the next step. A pre-approval letter is not a guarantee but it is a solid peace-of-mind tool to help you along your home buying journey.
Information to Gather & Provide For Your Pre-Approval Letter
- Pay Stubs:
Bring your most recent pay stubs from the past 2 months.
- Tax returns/W-2s:
Provide 2 years of the most recent federal tax returns (all schedules) and W-2 forms. If you’re self-employed, this includes your business/corporate tax returns.
- Bank Statements:
Include 2 of the most recent months of bank statements. These must show your complete account number.
- Other Sources of Income (Retirement, Pension, Social Security):
You may need to provide a 3rd month of bank statements to show receipt of these deposits.
- Divorce Decree/Marital Separation Agreement & Child Support Order (If applicable):
We may need to show which debts reporting on the Credit Report are whose responsibility. Also will need to show proof of receipt/ payment of child support and alimony.
Should you have additional questions or wish to discuss getting pre-approved, please give Rob a call!
Rob Miller, MLOP. NMLS#239865. Senior Mortgage Banker Providence Home Lending, a division of DAS Acquisition Company, LLC NMLS#227262 957 | Liberty Drive – Suite 201 | Verona, WI 53593 | 608-227-2002(o) 608-333-3833(m)