Friday, August 10, 2018

How to Obtain a Mortgage Pre-Approval

One of the very first steps in the home buying process is obtaining a mortgage pre-approval. Essentially, a pre-approval is a promise from the lender that you're qualified to borrow a certain amount of money at a specific interest rate, subject to a property appraisal and other requirements. Keep reading for some tips and information about getting a mortgage pre-approval at the Lake of the Ozarks.

Information Required for a Pre-Approval 

In order to get a mortgage pre-approval, you will need to submit some personal and financial information to your Lake of the Ozarks mortgage lender. This can include:

Identification Documentation
You'll need to provide personal information such as social security number, driver's license, current address, etc. There's a lot of paperwork involved in obtaining a mortgage pre-approval, so be prepared to fill everything out thoroughly and quickly to get through the process smoothly.

Proof of Income & Assets
In order to determine how much you qualify for in a home loan, your lender is going to need proof of how much money you make. Borrowers will need to show W-2 statements from the past 2 years, recent pay stubs, proof of any additional income and the two most recent years' tax returns (personal and business, if applicable).

Acceptable Credit Score
The better your credit, the better the interest rates you'll qualify for. Too low of a score could cause you to be denied for a mortgage. If your credit score is less than desirable, your lender will typically work with you to find ways that you can improve your score and better your chances at a mortgage approval down the road.

Employment Verification
Not only will your lender want to see recent pay stubs, but they will call your employer to check on your employment status and your salary. If you have recently changed jobs, your lender may want to talk with your previous employer. During the mortgage process, it's important that you don't change jobs. Any changes in employment and/or salary, could delay or even deny your approval. Self-employed borrowers will need to provide additional paperwork concerning their business and income.

Once you've provided all this information, your lender will evaluate your situation and determine what loan options, loan amount and interest rate you can qualify for. They will present this information to you in a pre-approval letter that is typically good for 60-90 days. Then you're ready to start house hunting!

Tips for Getting Pre-Approved

Not everyone can get approved for a mortgage. However, there are some things you can do to better your chances.

1. Gather Your Documents Early. 
Before making an appointment with your lender, be sure to gather up all the necessary documentation. Having all this information together and handy can speed up the process. If your lender asks you for any additional documentation, the sooner you can get it to them, the quicker the process of obtaining your mortgage pre-approval.

2. Improve Your Credit Score. 
Your credit score plays a big role in your mortgage pre-approval. If you're planning to apply for a home loan in the near future, it's a good idea to start taking a look at your credit now. Many people don't even know what their credit score is. Once you know your score, you can improve it by making sure to pay your debts on time, not opening any new credit accounts and scanning your report for any errors that may be on it.

3. Lower Your Debt-to-Income Ratio. 
Your debt-to-income ratio also plays an important part in a mortgage pre-approval. As a general guideline, you want your debt-to-income ratio to be 36% or less. Decrease your overall debt to improve your debt-to-income ratio.

4. Increase Your Down Payment. 
The amount of cash you have available for a down payment also comes into play when getting a mortgage pre-approval. Having a larger down payment can sometimes make up for less than desirable credit scores or other issues that could prevent you from obtaining a home loan.

Getting a mortgage pre-approval shows sellers and real estate agents that you are a serious buyer. Sellers have the confidence that you will be approved for a home loan at the Lake of the Ozarks after they accept your offer. If you have any questions about obtaining a mortgage pre-approval, please don't hesitate to reach out. If you're ready to get started on your mortgage pre-approval today, give me a call at 573-746-7211. As your mortgage professional at the Lake of the Ozarks, I'll discuss your options, offer competitive interest rates and back it up with the first-class service you deserve.

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

Direct: (573) 746-7211

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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