Securing a mortgage pre-approval in advance of your search is crucial. You want to determine in advance that you are approved for the mortgage amount you need to start your search. You should also understand and be comfortable with the approximate monthly payment amount. With a mortgage pre-approval in hand, you will be taken more seriously by a seller when presenting an offer.
For a mortgage pre-approval, a loan officer needs the following information:
- Personal information of all borrowers such as full legal names, social security numbers, birthdates, addresses, and phone numbers
- The amount you pay toward rent or your current mortgage each month
- Current balance in all bank and retirement accounts and market estimates for any other assets such as property you currently own
- Your employment history for last two years, including name of employer, address, phone, your title, and gross monthly income before taxes
- Any other special circumstances such divorce, bankruptcy, child support, credit issues, etc.
You will also need to provide the following documentation:
- Copies of recent paystubs for most recent month
- Copies of last two years of tax returns (all exhibits and attachments) and Form W-2s
- Copies of most recent two months of all bank, stock and retirement accounts
- Copy of driver’s license and Social Security cards
With this information, your loan officer can generate an mortgage pre-approval letter that will be attached to your offer to demonstrate your ability to close on a purchase. This makes your offer more attractive and conversely, many sellers will not consider an offer without an approval letter.