Readers: This is the final article in my 25-part no-nonsense “Mortgage Basics” quick-reference series. I hope you found the series to be informative.
The difference between being prequalified or preapproved for a home loan can be a critical factor in determining whether or not you’ll get the home of your dreams. In short, preapproved homebuyers are far more attractive to sellers than shoppers who are merely prequalified.
Thankfully, getting preapproved for a mortgage is a relatively simple process. Here’s how:
Make sure you’re ready. Deciding to own a home is a big responsibility — so make sure you’re really up to the task before committing.
Check your credit report. It’s important to make sure there are no mistakes on it because borrowers with the best credit scores get the lowest rates.
Shop for a lender. Today, online shopping makes it easy to compare rates and loan options.
Gather your documents. Your lender will require various paperwork including bank statements, pay stubs, W2 forms, tax returns, and documents showing any other sources of income. You’ll probably have to pay for a credit report at this time.
Wait for approval! Once the lender gives you a preapproval letter, you’re ready to start shopping for the home of your dreams. Best of all, you’ll then be able do it with confidence.
Photo Credit: GotCredit