Before you go looking for a home to purchase, you MUST get pre-approved! If you were shopping for a wedding ring and had $2000 you wouldn’t look at $5000 rings, right? Well the same thing goes when looking at homes to buy, you want to know exactly what you qualify for and where you are comfortable so you don’t look at homes you can’t afford – because it’s torture to do that to yourself!
So, talk to your lender and first! They will ask you for what seems like a bunch of paperwork, but really it will be easy to gather, and I’m happy to help you where I can! They will want – at a minimum – the following items
Last 2 years W2s
Last two years tax returns with all schedules (if applicable)
1099s and a copy of business license (if self-employed)
Most recent pay stubs (minimum 30 days)
Two months most recent bank statements (all accounts and all pages)
More paperwork they may need will be specific to you personally like those that pay child support, been through a bankruptcy, or divorce.
The great thing about all of this paperwork is it has reduced the amount of foreclosures and short-sales – or buyer’s being unable to make and keep up on their payments – and less foreclosures means your property values stay up – which you want especially if you’re a homeowner!
The lender will go through your information and let you know which type of loan you can get to purchase a home. Sometimes the lender will tell you that you aren’t quite ready, but oftentimes it’s a simple solution – so don’t give up if you’d like to own a home.
So now you have been pre-qualified – which means you know how much you can purchase and the lender has looked at the basic information to know you would likely qualify to buy a home. Pre-approval on the other hand, means the lender and their team have gone through everything to KNOW you can buy a home and this process usually takes 1-3 days.
Your lender will tell you this too, but I always have your back – DO NOT purchase any big items on credit, like furniture for your new home, new cars, motorcycles, boats, RV’s -if you have any doubts ask your lender first!!