It’s well known that getting preapproved for a loan is a great way to fast track your home buying process, as it proves that you have the financial resources to make an offer, and the commitment to actually following through. Also, Do This Before Choosing a Mortgage Lender in Denver.
A preapproval letter from a qualified lender is a ticket in the door during the early stages of your house hunting journey, and a major time-saver when it comes to closing the deal. It outlines exactly how much you can afford, which can inform your options moving forward.
Getting preapproved is a savvy decision, but it’s not quite as simple as showing off your paystubs or tax receipts. To obtain a preapproval letter, reputable lenders will typically require the following documentation:
- Two Years of Tax Returns, W2, and 1099s
- Employment Info & Salary
- Social Security Number (plus SSN for any co-borrowers)
- Bank Account & Investment Info
- Debt Obligations (includes student loans, credit card debt, car payments)
If you have another source of money for your down payment, like a gift or inheritance from relatives, you should also share this with the lender, as it will help them obtain a clearer picture of your finances.
To maximize your chances of securing your dream home, get preapproved by multiple lenders.
Denver mortgage lenders operate independently from one another and have their own unique methodologies for evaluating your finances and preapproving you for a loan.
By requesting approval from multiple lenders, you give yourself options and can select the one that offers the most favorable rates and terms.
There is a common misconception that getting preapproved by multiple lenders can impact your credit score. This is because the credit report inquiries that arise during the process can make it seem like you are attempting to open multiple lines of credit.
Rate shopping for a home loan should not cause any problems. To err on the side of caution, it’s a good idea to apply for loan preapproval simultaneously to keep the hard inquiries into your credit history confined within a specific time period.
With that said, there’s another reason to keep everything moving in a timely, efficient manner. Preapproval letters have a posted expiry date – typically around ninety days, so it’s wise to get approved just before you start looking.
If you need more time you can request a renewal but this may require a second credit check and more supporting documents.
For more information contact us today!