For those seriously interested in investing in some great Green Bay and N.E. Wisconsin real estate, getting pre-approved for a mortgage is a very helpful first step when it comes to setting those wheels in motion.
Those who get pre-approved can work with qualified realtors in Green Bay and N.E. Wisconsin to lock down the best shot at really getting the type of property that they want to own. This is because a mortgage pre-approval basically functions as an official guarantee that interested homebuyers are indeed qualified to borrow the money in question to make the purchase.
A mortgage pre-approval is basically a form stating that the lender believes that the homebuyer will be able to make the appropriate down payment and cover the mortgage terms of the real estate in Green Bay and N.E. Wisconsin that they want to buy. As long as the home is appraised at a value equal to or greater than the purchase price, the mortgage pre-approval remains valid. Depending on the lender, a mortgage approval will be valid for 60 to 90 days from the date it is obtained.
While mortgage pre-approvals are still subject to factors like property appraisal, they help homeowners prove their creditworthiness so that they can focus on the homes for sale in Green Bay and N.E. Wisconsin that they really want to land.
Steps to Getting Approved
Step One: Do a Credit Checkup
Anybody thinking of getting pre-approved will definitely want to make sure that their existing credit is in order before they take it to the bank, so to speak.
This includes getting access to credit reports and credit scores that will give potential buyers a better idea of what type of mortgages will be better for them, and the best interest rates that they can hope to lock down for their credit bracket.
This also gives homebuyers a chance to identify and patch up any red flags they might have with their credit so that it doesn’t affect the pre-approval process.
Step Two: Gather the Necessary Documentation
The next step to getting pre-approved for a loan is to make sure that all the necessary documentation is in place. In general, there are three types of documentation that potential lenders will want to see. This includes the following:
In order to perform a credit check, a lender will require access to the Social Security Numbers of any potential borrowers. The lender will look into the credit information independently, so there is no need to worry about furnishing access to this information.
It is important to have a valid form of photo identification like a driver’s license, passport or maybe both on hand to confirm the identity of the potential homeowners is accurate.
Proof of Income
Lenders will want to see plenty of proof of income. This includes tax information and returns, pay stubs as well as at least two years previous worth of W-2s.
In addition, if there are any additional sources of income like a part-time job, tip income, commission, dividend income, interest income, overtime, retirement benefits, VA benefits, Social Security Payment, child support or alimony payments to take into consideration, proof of any other valid source of income will also need to be adequately supplied.
Proof of Relevant Assets
Yet another important factor that will be taken into account during the assessment process is the assets that potential homebuyers have. This helps ensure that should income fall through, they have back up means to make payments at their disposal.
Depending on the type of assets involved, documentation like bank statements may suffice. In other cases, it will be necessary to provide additional information like proof of purchase on any of the relevant investments.
Keep in mind that if the borrowers are being lent money from a friend or family member to make their big purchase, they will also need to supply some form of valid guarantee or proof that the money is not a loan. If this is the case, they should make sure they have a signed gift letter to show to the lender.
Step Three: Wait
Depending on the lender, getting confirmation of the pre-approval can take anywhere from a couple of hours to up to the month, but the typical time to expect to wait is about two weeks. For those looking hoping to get pre-approved fast, they will want to explicitly seek out institutions that offer an automated underwriter process.
Keep in mind though, that as long as potential borrowers do all their pre-approval applications in a 45-day window, they can seek out multiple institutions to get the pre-approval on the same piece of real estate in Green Bay and N.E. Wisconsin. As long as the lender’s research is confined to the same 45 day period and the applications are for the same property, the credit report will only register one inquiry.
Step Four: Make an Offer
Once pre-approval has been granted, it’s time to work hand and hand with the best Green Bay and N.E. Wisconsin realtors to make an offer on that dream home.
While the mortgage pre-approval process may seem cumbersome, it is important to remember that buyers can expect to be taken much more seriously once they have it. The modern housing market is competitive, and buyers are going to favor those who have the proof that they have the means necessary to close the deal.
Of course, it is important to remember that mortgage pre-approvals will become invalidated after a certain period of time, usually about two to three months after they are issued, so interested buyers will need to act quickly to make an offer and get the ball rolling. Once they have the pre-approval in hand, experienced realtors in Green Bay and N.E. Wisconsin will be able to walk them through the process and help them guarantee the best results possible for their efforts.
When it comes to buying real estate in Green Bay and N.E. Wisconsin, a mortgage pre-approval can make all the difference between getting that dream house or having to settle.
Anybody interested in learning more about the mortgage pre-approval process and how it will help should reach out to their local Green Bay and N.E. Wisconsin realtors to learn more.