The Pre-Approval Process (What to expect)

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Getting pre-approved is the most important part of the home buying process.  Before you even look at your first house you should make sure you’ve talked with a mortgage loan originator.  It’s very important to not only know what you can get approved for but what you want to pay on a monthly basis and how much will be required at closing.  This is a brief walk through of what you can expect during the pre-approval process. 

A licensed loan originator will take all of your personal information to start the pre-approval process.  This will include employment info, banking info, social security number, etc.  During this process they will usually obtain your credit report as well.  Your credit score is a major component to finding the best loan program for you. 

After it’s been determined what options are available then you will need to send your loan originator a certain set of documentation.  The type of documentation may vary based on how you obtain your income.  Whether you’re self-employed or you receive commission income.  Typically, you will need to gather your most recent pay stubs, 2 years of W-2’s and two months of bank statements.  This is also very important.  It will allow the loan originator to confirm that the information collected verbally matches what the documentation shows.  Any listing agent for a property that you’re interested in will want to know that the information was backed up by documentation.  This makes your offer even stronger. 

The loan originator will typically send your information through a system known as an Automated Underwriting System (AUS).  These systems may vary based on the loan type but they’re fairly similar.  This is a final checkpoint to issuing a pre-approval letter and also very important for your future offers. 

By this point, you should not only know that you have a mortgage pre-approval but you should know what your estimated monthly payment will be on certain purchase points and what your estimated funds due at closing should be.  Your loan originator will send a copy of your pre-approval letter to both you & your real estate agent.