The Most Effective Way To Get Pre-Approved For A Mortgage
When starting the home-buying process, you’ll have a list of financial to-dos. One that should be at the top of every homebuyer’s list is a mortgage pre-approval. To help you better understand the process of getting approved for a mortgage, we’ve teamed up with First Colony Mortgage, our preferred lender, to go over some basic questions.
Why Get Pre-Approved?
No matter what you do, make sure the approval for the loan happens first. Don’t start your home-buying journey by falling in love with a home, only to find out that you can’t afford it. Start the process by finding what works for you. This is a very simple process that starts with filling out an application. This can either be done in person or online through our online application. The application details where your down payment is coming from, checks your credit profile, and outlines your financial health and history. A loan officer may ask for some additional information as part of the approval. It’s a fairly simple process that takes a short amount of time.
Set a Budget
Know your budget, and stick to it. By getting pre-approved first, you’ll know where to start, and can avoid getting in over your head with excessive monthly payments. If you’re buying a home with a partner, it will help both parties to be on the same page regarding expectations with both what you’re looking for in a home and how much you’re willing to pay. You’ll avoid more disagreements about choosing a home when you’ve narrowed down your search with a budget.
For first-time home buyers, the loan process can feel daunting and intimidating. That’s why we have a preferred lender to help you through the process and guide you through what’s happening. Since first-time buyers are new to the home-buying process it’s important because they typically don’t have as much financial history as other buyers. This means that their credit score will play a big part in the pre-approval process. Luckily, even if they have a lower credit score than they’d like, our lenders at First Colony Mortgage will work with them to get it to where it needs to be.
Another reason that getting pre-approved is so important is that it ultimately gives you buying power. Rather than guessing what fits inside your budget, you’ll know your limits ahead of time and then you can customize your home accordingly. From floor plans to the details, every decision will be that much easier after you’ve been pre-approved for a home loan.
Types of Home Loans
There are multiple types of loans available for homebuyers. These include:
The most common loan for homebuyers, backed by lenders rather than government agencies, and are set by the lender’s guidelines.
This government-backed loan is available to veterans through the Department of Veteran Affairs.
Rural Housing Loans
Rural Housing loans are backed by the United States Department of Agriculture and Rural Development. They do have income and geographical restrictions.
Backed by the Federal Housing Administration that requires borrowers to pay mortgage insurance premiums that protect the lender if they default.
What You’ll Need to Get Pre-Approved for a Mortgage
It’s important to gather a few important forms and specific information in order to get pre-approved for a home loan. Here are a few things you’ll need:
- Last two years worth of tax returns
- W-2 forms
- One-month pay stubs
- Most recent bank statements
- Copy of driver’s license
- Credit score (you can find out what yours is through your bank or you can request a free copy once a year through annualcreditreport.com)
All of these items can be submitted in person, or attached using First Colony Mortgage’s online application process, though you won’t have to worry about pulling your own credit report. The credit report link above is purely for your own reference. Our lender will be the one that makes a credit inquiry from the credit bureau on your behalf.
By examining every inch of your application, the lenders at First Colony Mortgage will work with you to determine the best loan type for your situation. When working with EDGEhomes and First Colony Mortgage, it’s about finding the perfect home with a loan that you can afford. With us, you’ll be sure to find the right home at the right price.
EDGEhomes and First Colony Mortgage
First Colony Mortgage is ready to assist you in financing your EDGEhome. As part of the pre-approval process, we verify things like; employment, income, and assets to make sure you qualify before you go under contract. That way you won’t have any surprises when your home is ready.