The Most Effective Way To Get Pre-Approved For A Mortgage
When starting the home-buying process there are a few things you should do. One that should be on the top of every homebuyer’s list is a mortgage pre-approval. However, the loan process might seem very daunting to many first-time homebuyers. Luckily, in conjunction with First Colony Mortgage, our preferred lender, we’re here to help you understand the process of getting pre-approved for a mortgage. Below, we will walk you through the pre-approval process and explain what you’ll need to do so.
Why Mortgage Pre-Approval Matters
The first thing to do when searching for your new home is to get pre-approved for a home loan. This is important to the home-buying process because it will help minimize the stress of finding a home by clearly outlining what’s in your budget. When you’re pre-approved there’s no need to stress. What’s even better is that the loan officers at First Colony Mortgage will help walk you through the entire pre-approval process. It’s a very simple process that starts by filling out an application. This can either be done in person or online through our online application. This application details where your down payment is coming from, checks your credit profile, and outlines your financial health and history. The 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.
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.
Set a Budget
Know your budget. And don’t go over your budget. By getting pre-approved first, you know where to start and don’t get in over your head with excessive monthly payments. Setting a budget is helpful if you’re purchasing a home with a partner. It can help both parties be on the same page about your expectations in 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.
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
Along with buying power, pre-approval is very important for first-time homebuyers.
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. And since first-time buyers are new to the home-buying process, a pre-approval details the amount of home they can afford. It’s also 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 will work with them to get it to where it needs to be.
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 Mortage
It’s important to gather a few important forms and information in order to get pre-approved for a home loan. It can get pretty tedious when you have to go back and forth with a home loan because you don’t have the right paperwork. So 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 free copy once a year through annualcreditreport.com) (First Colony will pull credit as part of this, they could know beforehand, but FCM will be pulling credit as you say below.)
All of these items can be given in person or attached during 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.
After all of these items are given, loan officers will then go over them. 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 EDGEhomes’ preferred lender. When building a new home, the mortgage can be different than existing houses. First Colony Mortgage is ready to assist and guide you through 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.