Shopping for home loans in Texas? There’s a probability that you might get confused in the process. This is where this guide can help you out!
Getting a pre-approval on a mortgage is a simple yet multi-step procedure. An important thing to note here is that mortgage pre-qualification and pre-approval don’t mean the same things.
So what is a mortgage pre-approval?
A mortgage pre-approval is a declaration, usually a paper or memo, showing the value of a mortgage a lender can offer you. It is the main component of the pre-approval process that allows homebuyers to acquire home loans. Its requirements, however, vary from lender to lender and are also impacted by a borrower’s ability to pay off the loan.
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So don’t worry, because your mortgage pre-approval process can be crystal clear as long as you understand the following key points.
1. Document Submission
To get a pre-approval on a mortgage, you need to submit all the required documents regarding your income, debt, and asset. It includes salary slips, business license, W-2s form, and proof of other income sources such as rent. You may also be asked to submit CDs, cash reserve details, and bank statements.
2. Credit Check
The next step in acquiring mortgage pre-approval is a credit check. This is when your lender will assess your credit history to determine how much mortgage you can afford. If your credit history has a few undesirable instances such as bankruptcy or a foreclosure, we suggest you take some time to overcome them by staying on the right track.
You can easily get your credit score up by paying bills on time, not making significant credit card purchases, and preventing deadlines extensions. The best part is that the government’s COVID protections entitle citizens to obtain a free credit copy from approved credit bureaus.
3. Pre–approval
Once your mortgage lender has all the necessary documents and your credit profile in hand, they’ll start the examination. In case you’re provided the pre-approval, you will be sent a letter stating so.
The regular qualifying ratio used by most of the lenders is 28/36. So that’s what you should target.
What Do You Get After Becoming Pre-Approved?
The Good Faith estimate, AKA the loan estimate is sent to pre-approved individuals. This statement is a brief two or three pager document that entails all the details about your loan program. It mentions basic information such as loan terms, interest rates, payment amounts, and closing cost breakups.
Ready to Apply for a Mortgage Pre-Approval? Z Finance Solutions Can Help!
At Z Finance Solutions we have made the mortgage pre-approval process easier and hassle-free for buyers and investors. Our realtors offer expert real estate advice and home loans assistance in Texas.
So whether you’re looking to buy a commercial property in Texas or your dream home, get in touch with us now!