What You Need to Get Pre-Approved
If you’re wondering how to get pre-approved for a home loan , there are specific criteria you’ll need to meet to qualify.
Below we’ve provided a comprehensive list of all the items you’re required to submit to your mortgage lender to obtain your mortgage pre-approval letter.
A Copy of Your Drivers Licence
The majority of buyers will be asked to provide a copy of their driving license. This document is essential for fraud detection and buyer verification.
Verification of Your Social Security Number
It’s vital that you can verify your social security information to your lender by providing them with your social security number . Not only does this verify your identity and prevent fraud, but it also proves that you are a U.S. citizen or resident. Although lending is possible for foreign nationals, it’s a complicated process. Typically, buyers from outside the U.S. will have to make cash purchases on properties if they don’t already have a social security number.
Mortgage Statement
If you currently own a property, whether you plan to sell it or rent it out, you’ll have to show your lender how much you pay monthly for the property.
This is part of the calculation to figure out your debt to income ratio (DTI). Leaders may also run a comprehensive market analysis on the property address to confirm that you have equity on the property. If you’re behind on payments for this house, you may be ineligible for another mortgage pre-approval .
Recent Bank Statements
Lenders will ask to see your recent bank statements to examine your credits and debts thoroughly. During this process, you’ll have to be as honest as possible, disclosing any personal or professional debts.
Pay Slips
You’ll have to provide 30 days or two cycles worth of payslips to prove the amount you earn to the lender.
Homeowners Insurance Policy
You will have to provide a copy of your current homeowners insurance policy for each property you owe to your lender.
Property Tax Bill
If you own your own home, you’ll be asked to provide a copy of your property tax bill. Taxes are another factor used to determine your DTI.
Tax Returns
To help calculate your income, mortgage lenders typically need: 2 years of personal tax returns. 2 years of business tax returns (if you own more than 25% of a business and receives partnership income)
Investment/Retirement Account Statements
If you have an investment or retirement account, you’ll need to show one or two monthly statements to your lender. You may not plan to use these funds towards your home, but they can help to prove that you’re qualified. Underwriters want you to confirm that you have a certain amount of cash in reserves.