When going through the home-buying process, there are a million questions that come up. Lucky for you KFS Mortgage Company is here with answers to help you through the process.
What is Pre-Approval, and Why Does it Matter?
Being pre-approved means you have been approved by a lender for a specific loan amount. Being pre-approved provides you with several advantages.
- Having a pre-approval certificate in hand gives you greater negotiating power with sellers. In fact, most real estate agents strongly recommend that you get pre-approved before you make an offer on a home.
- You will know exactly how much you can afford to focus on home shopping.
- In many cases, you can get to closing faster because you have already provided much of the documentation needed for loan approval.
Being pre-approved is different from being pre-qualified. To get pre-qualified, you tell a lender about your income, assets, debts, etc., but they do not verify the information, and they typically do not pull your credit. A pre-qualification will tell you what you will probably qualify for if all the information you provided is accurate and your credit is good.
Reasons to Get Pre-Approved by KFS Mortgage Company
You can count on our pre-approvals because we use the same criteria to evaluate and issue pre-approvals that we use for making loan approval decisions, unlike other lenders whose “pre-qualifications” can lead to unpleasant surprises when you apply for a loan later.
- Before you make an offer on your dream home, we will make sure both you and your co-borrower have qualifying credit so that you won’t be surprised by unknown credit issues and lose out on the home of your dreams.
- We’ll answer your questions, go over your loan program options and provide a pre-approval certificate that you can take to your real estate agent and use in your home buying negotiations.
- If you don’t currently qualify for a mortgage loan, we’ll take the time to learn about your homeownership goals and provide guidance and the specific action you can take to help you reach your goals.
Information Needed for Pre-Approval
- Your employer’s name, address, and phone number for the past two years
- W-2’s for the past two years
- Pay stubs covering wages from the most recent 30-day period
- If self-employed, the previous two years’ signed and dated personal and business tax returns (if applicable) with all schedules attached
- Last two statements for all deposit accounts – checking, savings, investment, IRA, etc.
- If you currently rent your home, your landlord’s name and address for the past two years
Career Changes and Mortgages Don't Always Mix
Even if a career change means a better income, it might throw a wrench in your home buying plans. Lenders like consistency. If you're changing industries or moving from a salaried job to a commission-based position, it might make your lender pause. It's best to wait until after being approved for a loan to change careers. If you change jobs later, make sure you'll still be able to make your monthly mortgage payments, and remember that defaulting on a payment can ruin your credit and potentially cause you to lose your home.
We hope that this information provides you a sense of clarity when it comes to the pre-approval process. Reach out to KFS Mortgage Company if you have any more questions.