If you’re looking to buy a home, you’ll want to make an offer quickly when your dream house appears on the market. One essential step in making that happen is getting pre-approval for a mortgage. You might not know how the pre-approval process works. However, that’s just where mortgage brokers Las Vegas come in handy. We can walk you through the pre-approval process to help you make an offer as quickly as possible on your dream home.
Understanding Mortgage Pre-Approval
If you are pre-approved for a mortgage, the mortgage lender has determined how much you can safely borrow and any loan programs that you might qualify for. The pre-approval stage also shows what interest rates you may be eligible for. These numbers are based on a variety of factors such as employment history, debts, income, and credit score. If you qualify for pre-approval, you will receive a written letter from a lender verifying your pre-approval. Most letters are valid for 60-90 days.
Finding a Lender
To get pre-approval for a loan, you will need to find a lender first. There are many resources available online to help you get pre-approval. If you match with a lender online, the lender will review your loan qualifications to determine if you meet their guidelines and criteria.
Check Your Credit
Your credit is a major determining factor in whether or not you get a loan and what kind of loan you’re eligible for. Typically, you’ll need a credit score between 620 and 740 to get a favorable loan and interest rates. Ideally, you should know your credit score before contacting a lender.
Know Your Credit History
Your credit history is a major factor in determining your eligibility for a loan. Before you submit a loan application, it’s a good idea to request copies of all your past credit reports. If you notice any errors, be sure to dispute them before you apply for a loan.
Understand Your Debt-to-Income Ratio
Your debt-to-income ratio, also called the “DTI,” refers to a percentage of your monthly income that goes towards making debt payments. This can include student loans, car loans, and credit cards. Online resources exist to help you determine your debt-to-income ratio. Most lenders prefer a DTI score of 36% or less. This includes the mortgage.
Collect Your Financial Account, Income, and Personal Information
This information, including your current address, Social Security number, and employment details are all important bits of information to have on hand for pre-approval. You will also need information from your bank account, investment account, and some proof of income such as a 1099 or W-2. Most lenders want to see two years’ worth of regular income.
If you’re searching for your dream home, it helps to be pre-approved beforehand so that you can place an offer as soon as possible. Don’t hesitate to contact our office for more information and pre-approval tips.