5 Things you Need When Getting Pre-Approved for a Home Purchase

Getting prequalified for a home loan is an essential step in the home-buying process. For many reasons, potential buyers often wait to get their pre-approval done before looking at homes. We do not recommend this for several reasons, but the biggest is not knowing your budget and what you can afford. If you are serious about getting your home search started this year, here are five things you need to do to get prequalified:

Gather Your Financial Info

In order to get an idea of your financial situation, your lender will want to see some of your financial documents, such as bank statements, pay stubs, tax returns, and credit reports. Typically, lenders like to see two months of bank statements and check stubs, the last two years of your tax returns, and a credit report which they often produce.

Find a Mortgage Lender

Choosing a lender is a process in itself, as many financial institutions, such as banks, credit unions, mortgage lenders, and brokers, are able to provide a home loan to home buyers. Typically, we recommend shopping around for rates and using a LOCAL lender that specializes in mortgage loans, as opposed to a general bank, online lender, or credit union. A local lender that specializes in mortgage loans is often more familiar with the local buying process and is more readily available if they are needed by a listing agent, escrow officer, or any other party involved with the purchase that needs loan information.

Meet with Lender

Once you find a lender you like, you can set up a meeting to provide your financial information and discuss your potential purchasing budget for the purchase. Meetings can happen either in person or over the phone, internet, etc. Many lenders today have online portals to make it fairly easy to upload your documents for your preapproval, but you can always send scans via email, fax, or even physical copies if you wish to meet in person.

Determine The Budget

Once you meet with your lender and provide your financial information, they will provide you with several different loan products that may best fit your needs and target. These can include different loan types, such as Conventional, FHA, or VA, each of which come with different down payment requirements. Your budget will be determined by your income, down payment, creditworthiness, and how much you are willing to spend on a mortgage.

Skip the Pre-Qualification and get Pre-Approved

Once your budget has been established, we can request a Pre-Approval letter. There can often be some confusion when it comes to pre-qualifications and pre-approvals, so here is the difference:

  • Pre-Qualification: Pre-Qualified based on a basic review of the buyer’s assets and income, but creditworthiness, and is NOT an official pre-approval.
  • Pre-Approval: Pre-Approved based on a financial review, including bank statements, check stubs, tax returns, and creditworthiness.

If you are going to go through the trouble of getting some of your information together for a lender, you may as well get it ALL done so you have a document that will allow you to write offers. A pre-qualification from even a well-known bank will often get pushback from most listing agents since it is not an actual pre-approval unless you find a desperate seller. A pre-approval means a lender has verified your income, assets, and creditworthiness and has vouched for your ability to qualify for a home purchase.

Getting pre-approved for a home loan is a straightforward process that involves gathering financial information, meeting with a lender, determining a budget, and getting a pre-approval letter to submit offers. By taking these steps early on in your home search, home buyers can have a smoother and more successful home-buying experience!

Who is The Prestige Team?

Rancho Palos Verdes Realtor Broker Associate Karen Anderson, along with her Real Estate Team, The Prestige Team, has been selling residential real estate in the South Bay, including Rancho Palos Verdes, San Pedro, and far beyond LA County for over 27 years and is ranked in the top 1% of realtors in Rancho Palos Verdes.  We specialize in transforming homes into impeccably presented real estate listings that command top dollar in the shortest amount of time!  

Learn more about us below!

Before After

For our Buyers:

Added Benefits When Working With Us

Contract Knowledge

The Residential Purchase Agreement is 10 pages of terms and conditions that stipulate every aspect of the purchase, and we know exactly how to use them to your complete advantage!

Expert Negotiators

As experienced Full-Service Realtors, we know how to leverage you buying and bargain power. Whether competing to get your offer accepted or negotiating repairs, our goal is to get you a great deal!

Team = Always Available

The added benefit of working with The Prestige Team is that one of our Real Estate Professionals is always available to help. No missed opportunities!

On Every Listing:

Need Additional Assistance? We Specialize in that!

Decluttering & Emptying Properties

Need help with decluttering? Whether you need a few boxes and an extra set of hands, have a house full of items that need to go, we have the resources in place ready to assist with your needs!

Schedule Management

Schedule Management is crucial if you have a time frame in mind for the sale of your home. Let us use our experience to ensure every aspect of preparing your home for the market stays on schedule!

Team = Always Available

The added benefit of working with The Prestige Team is that one of our Real Estate Professionals is always available to help. No missed opportunities!

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