Applying for a mortgage can be a complicated process, but it can help to learn from other people’s questions. Here are some of the most frequent questions that I get asked.
Q.) How do I get pre-approved?
A.) One of the first steps in the mortgage process is getting pre-approved for the amount you wish to borrow. It’s important to have this document to include with your offer to purchase your new home. It’s not hard, but it takes a bit of effort. First you submit a loan application along with proof of income and perhaps some additional docs. The lender runs it through their system and pulls your credit report and can then provide you a written statement of the amount you have qualified to borrow.
Pre-approval is only offered on home purchase loans where a sales contract is not yet signed. It is not a rate lock, loan approval, or commitment to lend. You must submit additional information for review and approval.
Q.) Do I have to sell my home first?
A.) It depends. If you can afford mortgage payments on your existing property and on a new property, then you may not have to sell your home first. Remember that the debt-to-income ratio is a huge factor for qualifying for a mortgage.
Q.) What documents do I need?
A.) A lender will need documents including income verification, W2s, federal tax returns, a copy of a cancelled earnest check, among others.