One of the first pieces of advice you’ll probably receive if you’re interested in buying a home is to get pre-approved for a mortgage before you shop. While a pre-approval letter has always been an important first step in the home buying process, it’s even more critical in today’s hot and crowded housing market.

What is a Pre-Approval Letter?

A pre-approval letter states that a lender has tentatively agreed to loan you up to a certain amount of money to purchase a home. However, a pre-approval letter doesn’t guarantee you the loan as circumstances such as income or mortgage rates can change.

Why Do I Need One?

Here are a few reasons why getting a pre-approval letter before shopping for homes is so important:

  • It helps determine how much house you can afford given your current financial situation. That way, you’re not shopping for homes that are outside of your budget.
  • Having a pre-approval letter in hand means sellers will take you more seriously as a buyer because you already know how much you can afford and that a lender is willing to loan you that amount.
  • You’ll save time during the closing process with a pre-approval as a lot of your financial information will already be available to your lender.

Documents To Provide

Here’s some paperwork you may need to during the pre-approval process:

  • Township Assessed Value Letter
  • Current Mortgage Statement, if Applicable
  • Most recent Property Tax Bills
  • Divorce Decree, if applicable
  • 1 month of your most recent paystubs
  • 2 years of W2s
  • 2 years of signed Federal Income Tax Returns with proof of filing
  • 2 years of signed Business Federal Income Tax Returns with proof of filing
  • Homeowners Insurance Quote
  • 2 months of current Bank Statements
  • Current 401k/Investment Statements
  • Social Security Benefit Notice
  • Purchase Agreement

Apply Today
Start the pre-approval process with United Financial today so you can start creating memories in your new home!