Buying a house can be complicated. That’s why it’s important to plan ahead wherever possible.

One highly recommended step is to get pre-approved for a mortgage before you start house hunting. This tells you how much house you can afford and shows the seller you’re serious when you make an offer. Learn what the pre-approval process entails so you know what to expect going into it.

Gather Documentation

Be prepared to share the following information with any lenders you contact for mortgage pre-approval:

  • Proof of income: This may include W-2 statements from the past two years, recent pay stubs, proof of bonuses, tax returns, and year-to-date earnings.
  • Employment verification: Expect lenders to call your employer to ensure you’re currently employed. If you own a business, you may be asked for a profit-and-loss statement.
  • Credit history: Every lender is different, but most look for a credit score of at least 620. You may want to run your own credit check before seeking mortgage pre-approval so you have time to improve it, if necessary.
  • Proof of assets: Demonstrate that you have funds to cover a down payment and closing costs by providing bank statements from the past two or three months.
  • Debt-to-income (DTI) ratio: Lenders want to see a DTI of 43% or less, indicating that your monthly debt payments equal no more than 43% of your monthly income.
  • Identification information: Finally, you’ll need to show a photo ID, like a driver’s license, and give your Social Security number.

Time it Right

Once you submit the necessary information, you can expect to receive a mortgage estimate within three business days. Pre-approval only lasts for 60 to 90 days, so you don’t want to apply too soon. If you’re in the market for a new home, seek pre-approval right before your house hunt begins.

Shop Around

Getting your first mortgage estimate is exciting. It makes the journey start to feel real. But there’s no reason to settle on the first offer you receive. Shopping around allows you to compare interest rates and fees so you can choose the deal with the most favorable terms.

Get Your Pre-Approval Letter

Once you choose a lender you like, ask for a pre-approval letter you can take with you when viewing homes. With this document in hand, sellers will see you as a more competitive homebuyer. Plus, with the bulk of the mortgage process out of the way, you can focus more on getting ready to move.

Are you ready to find your dream home? Turn to Vutech | Ruff, Cutler Real Estate, to help make it happen. Our award-winning real estate company has over 60 years of combined experience serving homebuyers and sellers in the Greater Columbus area. Our goal is to make the journey to homeownership as seamless and stress-free as possible. To speak with one of our knowledgeable agents, please call our real estate office at 614-897-0618 or contact us online.