Mortgage Pre-Approval Letter

by: Joshua Bucio

Mortgage Pre-Approval Letter

A mortgage pre-approval letter is very important when looking to buy a home. Today’s market demands a buyer have a pre-approval letter included with an offer to purchase for a home for sale.

“A pre-approval letter shows a seller you are a serious buyer.”Joshua Bucio

All banks and mortgage companies will require you to be pre-approved before they issue you this letter. There is a process required, in order for a company to work on your pre-approval. Typically, it only takes about 2-3 days to get you pre-approved, unless you have a unique situation. A unique situation would be someone that is self-employed with different types of business income or someone with a lower credit score.

 

The Pre-Approval Process

You will need to complete a full application with your lender, along with supplying them with a list of documents. Here is the typical list of documents a lender will need from you.

Two Years of Tax Returns: These returns will show proof of the income you have reported to the IRS. These are most important for anyone that has self-employed income.

Two Years of W2 Statements: The W2 statements show the income you made from the employers for the last two years.

30 Days of Paystubs: These will show the income you are currently making and will be used to match up with your W2 statements. You want to be able to show you are on track to make the same amount of income as last year, if not more.

Liquid Asset Statements: These statements will show the balances of all liquid asset accounts you may have. Examples of liquid asset accounts are savings, checking, 401k, IRA’s, stocks and bonds.

These items will be used to verify the information you provide on your application. Then, the lender will run your completed application through an automated approval system, where it gives a result of an approval. It’s very rare right now to find a lender that will look at your application on a manual situation. Most lenders will use some sort of automated system.