We’ve discussed why mortgage pre-approvals are so important when buying real estate, but we haven’t discussed how the real estate industry has integrated them into almost every transaction. Most listing agents nowadays specify in their listing that, whenever an offer is submitted to the seller, the agent representing the buyer shall also provide evidence of a reputable lender’s pre-approval. They also typically require the buyers FICO (credit) score and (POF) Proof of Funds showing that the buyers are not only creditworthy, but also have the necessary funds to complete the purchase. Gone are the days of finding out 60 days later that the buyer doesn’t qualify, and the seller has to start all over again. If you’re currently searching for a home, and haven’t been pre-approved, we suggest you give us a call to get the process started!

In order to pre-approve you for a mortgage loan, the lender will need to review documentation pertaining to your employment, income, monthly bills, credit history, checking and savings accounts, other assets, and any child support or alimony payments/income that may apply. If you own other property, they’ll also need rental agreements showing the income from those properties, along with mortgage information for each one (including mortgage info for your current residence, if owned). If you’re self-employed, the lender will also need a copy of your most recent federal income tax returns for two years (1040’s only, as state tax returns aren’t necessary), along with a year-to-date profit and loss statement. Following is a list of items you can use as a guide to help gather the necessary information prior to your meeting with the lender.