What It Takes To Apply For A Mortgage

Dated: 05/24/2018

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Congratulations!  You've decided to become a homeowner for the first (or maybe, not) time!

It can be a daunting experience, but with the proper knowledge and guidance, it can be stress free.

After you have selected a Realtor and a mortgage loan originator (sometimes referred to as a Loan Officer or MLO), you are going to be asked to complete a Loan Application.  In order for the MLO to fully pre-qualify you with a conditional approval, you will need to submit the following:

1--Last two (2) year's W-2's

2--Last two (2) year's tax returns

3--Last 30 days of paycheck stubs

4--Most recent bank, investment, and retirement statements

5--Copy of Driver's License

6--Copy of Social Security Card

If you don't have one or more of the six (6) items?  Don't give up.  Your MLO will probably have an alternative for you.  It may require more down payment or a higher interest rate, however.

What is the difference between a Pre-Qualification letter and a Pre-Approval letter? 

There are different opinions of the specific difference, but general speaking, someone with a Pre-Qualification letter may or may not have completed the application or submitted documentation.  In other words, the letter may have been issued based on a what you, the buyer, have told the MLO, not but necessarily proven with documents. 

 A Pre-Approval letter will be issued more than likely as a Conditional Pre-Approval letter.  That means that the MLO has received your application and documentation, and pulled your credit.  He/she has determined that you would most likely be approved for a mortgage loan at a certain price point.  Where the conditional part comes in is that no one can be fully approved without a contract for purchase for a specific property address.  While you may be financially approved at the price, if the monthly taxes are higher than expected, or if the property does not appraise for the sales price, the full approval may not be granted.

Yes, a Pre-Qualification letter can be done quickly without the submitted documentation, but it won't hold as much weight with the seller and listing agent as a Conditional Pre-Approval will.

Pre-Qual's or Pre-Approval's do expire.  Some in as little as 30 days, others may be good for up to 90 days.  This is because your MLO has to ensure that no changes have been made to your qualifications.

Don't want to have your credit pulled because it will place a "ding" on your score?  Most credit professionals will say that it only lowers 3-7 points.  And, if you "shop" MLO's, meaning contact more than one (1) to compare rates and offers, if it is within the close period of time, your credit will only be affected once because it is for the same reason.



 

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Sherry Hamm

Sherry Hamm obtained her Texas Real Estate License in 1999. Sherry is a devoted full time residential Real Estate Professional focusing primarily on Houston's Westside, Katy, Northwest/Southwest Harri....

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