Before you can start shopping for homes for sale in Lakeland, it’s important to get a pre-approval letter from a lender. This letter indicates how much money you’re eligible to buy based on your credit score, employment history, and other factors. Here’s a checklist of what you’ll need to provide in order to get a pre-approval letter from your lender.
Income and Employment
Your income and employment status will need to be verified first if you want a mortgage from a reputable lender. This requires you to present tax returns, pay stubs, and any other documentation that demonstrates you have a consistent flow of income coming in. In the event that you are self-employed, you will be required to provide additional documentation, such as a statement of profits and losses.
Assets and Debts
Your bank will want to see a list of your assets and debts. This includes savings accounts, investment properties, outstanding loans, and credit card balances. They can get this information by asking you to provide two months’ bank and IRA statements. They will use this information to determine your available money for a down payment and closing costs.
Credit Score
The credit score is one of the most important factors lenders consider when determining whether or not to give you a loan. The higher your credit score, the lower the interest rate you’ll be offered. If your credit score is low, you may not be able to get a loan at all. Even if you can get a loan, the interest rate will likely be much higher than it would be for someone with good credit. The lender will need to see your credit report to give you a pre-approval letter. Lenders will use your credit score to determine how much of a risk you are to default on your loan.
Proof of Down Payment
When you are ready to make an offer on a home, you will be required to provide evidence of the down payment you intend to make. The majority of the time, this will come in the form of a bank statement or a letter from your financial institution. Your savings, investments, or even family members’ generosity could provide the funds for your down payment.
Other Documentation
Your lender may also require additional documentation, such as a copy of your driver’s license or social security card. For renters, they will likely need to provide a copy of their lease agreement and a record of payment for the last year. They may also ask for proof of homeowners insurance and a signed purchase agreement.
At MEGG Homes, we are with you every step of the home-buying process. If you need to get prequalified for a home loan, let us help you get started with one of our preferred lenders!
By following this checklist, you can ensure you have everything you need to get a pre-approval letter from your lender. This will give you the confidence to make an offer on your dream home.