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Whether you are a first-time home buyer, looking to buy a second home or an investment property, the first step is to understand the mortgage pre approval process so that you can get a pre approval letter.
What is a pre-approval?
The mortgage pre-approval process is where a lender reviews your income, employment, credit, and assets. After reviewing the credit qualifications, the lender will issue a pre-approval letter mentioning how much home loan you might qualify for.
Why should I get pre-approved?
There are several reasons:
- You will know how much loan you qualify for.
- You will know how much your estimated payments would be. Sometimes, even if you qualify for more, you would like to keep your payments lower because of other obligations.
- Most real estate agents (especially the good ones) will not show your properties till they are sure you are pre-approved for a mortgage.
- Sellers won’t consider your offer to buy, till a pre-approval letter is attached to the offer.
- If there are any red flags, it gives you time to work on them and correct them before you buy a house.
Where do I start?
Please start by completing the loan application by downloading the InstaMortgage app from the App Store or on our secure site. Do your best to complete all the fields, leave the ones you can’t. It should take you 10 minutes or less.
What documents do you need for mortgage pre approval?
If you are a wage earner
- 2 Most recent Pay Stubs, Bank Statements, and W2s
- Most recent Tax Returns
If you are self-employed or some part of your income/loss comes from a business you own:
- 2 Most recent tax returns (Personal and Company)
In some cases, other documents may be required to complete the pre-approval process.
How long does it take to get a pre-approval?
It typically takes 1-2 business days to complete the pre-approval process at our end. We may be able to rush it if you need to make an offer on a property sooner than that. In some complicated cases, it could take longer than 3 business days.
How long is the pre-approval good for?
A Pre-approval letter is usually good for 60-90 days. However, we at InstaMortgage understand that it’s not always possible to find a house and get your offer accepted in 3 months. We do not make you go through the entire process again after 90 days. If nothing has changed with your credit qualification, we will simply renew your letter and issue you a new one. Absolutely no hassle at your end.
Will it impact my credit score?
Yes, it can potentially impact your credit score. The amount of impact is dependent on your credit profile, the stronger the credit – the lesser the impact. However, we usually do a soft pull of your credit, unlike other lenders, which has no negative impact. In some cases, we can accept a full credit report (that shows trade lines and credit scores) if you had it recently pulled by another lender. Credit reports pulled online are usually not accurate for mortgage purposes as they may reflect a higher credit score than what is used for qualifying mortgage loans.
Whether it impacts your score or not, the credit report has to be pulled to complete a “true” mortgage pre-approval process.
Can the pre-approved amount change in the future?
Yes, the amount can change for various reasons. Any change in your income, assets, or debts can increase or decrease the amount of loan you were pre-approved for. Also, an increase in mortgage rates would mean you qualify for a lower loan amount now and vice-a-versa.
Why should I start the mortgage pre approval process with you and not a big bank?
There are several reasons:
- We are both a direct lender and a mortgage broker. What that means for you is that we have a much wider range of loan programs than any leading bank. Also, we are able to shop multiple lenders to find the best possible rates for you.
- Our pre-approval letters don’t expire if nothing has changed at your end (see above).
- If you let us know, we will call the listing agent for the property where you have made an offer. We will try to impress upon them how qualified you are. Listing agents prefer to work with lenders who are pro-active in their communication and confident that they would close the transaction.
- We may be able to close your transaction faster than big banks.
- You get to work directly with me, one of the most reputable loan officers in the country. That means you get the kind of insight and advice you won’t get working with a loan officer at a bank. By the way, did you know that bank loan officers do not even have to pass a test to originate loans?
- Our customer service is reflected in all 5 Star reviews on Google Local and Yelp. How many banks can boast that?
Will my rate get locked after pre-approval?
Rates are never locked at the pre-approval stage. We use an average rate to work the numbers for qualification. Your rate can only be locked when your offer to buy a house is accepted.
What are the fees/costs associated with pre-approval?
Our pre-approval is totally complimentary. Even though we incur some costs at our end during this mortgage pre approval process, we make it easier for you to get pre-approved with us.
Email me at [email protected] to get started with the mortgage pre approval process.