A guide to mortgage pre-approval for potential homeowners eview your credit report to ensure there are no errors

By JEFF HAMMERBERG

For many potential homebuyers, the mortgage pre-approval process can be a daunting and confusing experience. However, obtaining a mortgage pre-approval is an essential step in the home buying process, as it demonstrates your financial readiness and helps you stand out as a serious buyer in a competitive market.

In this article, we will outline the exact steps for getting pre-approved for a new mortgage loan, so you can confidently embark on your home buying journey.

Step 1: Research potential lenders.

There are various mortgage lenders to choose from, including banks, credit unions, and non-bank lenders. Take the time to research and compare interest rates, fees, and customer reviews to find a lender that best suits your needs. eferrals are always great, and the real estate professionals at ay ealEstate.com can refer you to B mortgage lenders they trust and have a relationship with.

Step 2: Review your credit report and score.

Before starting the preapproval process, it s essential to review your credit report and score to ensure there are no errors or discrepancies. our credit score plays a significant role in determining your eligibility for a mortgage and the interest rate you ll receive. If necessary, take steps to improve your credit by paying down debts, disputing errors, and making timely payments.

Step 3: Gat er necessary fnancia docu ents.

enders will re uire a variety of financial documents to assess your creditworthiness and ability to repay the loan. Some of the essential documents you ll need include

• Recent pay stubs

• W-2 forms or 1099s from the past two years

• Federal tax returns from the past two years

• Bank statements from the past few months

• Asset statements (e.g., retirement accounts, investments)

• Proof of any additional income sources

Step 4: Deter ine your bud et.

Before seeking pre-approval, it s crucial to determine how much you can afford. our ay ealEstate.com ealtor will help you to crunch the numbers. ogether, you ll consider your monthly expenses, debt-to-income ratio, and desired down payment to establish a budget for your new home. Be realistic and remember to factor in additional costs such as property ta es, homeowners insurance, and maintenance e penses.

Step 5: Sub it your ort a e pre-approval application.

Once you have chosen a lender, complete their mortgage pre-approval application. This will typically involve providing your financial documents, Social Security number, and permission for the lender to perform a credit check. Be prepared to answer uestions about your income, employment, and financial history.

Step

6: Await the lender’s decision.

After submitting your application, the lender will review your financial information and credit history to determine your eligibility for a mortgage. his process is pretty uick and often happens the same day. If approved, the lender will issue a pre-approval letter, which outlines the maximum loan amount, loan type, and interest rate you ualify for.

Step 7: Keep your pre-approval up-to-date.

mortgage pre-approval is typically valid for - days. If you don t find a home within that time frame, you may need to update your pre-approval with your lender. Be sure to maintain your financial stability during the home search process, as any significant changes in your credit, income, or debt could affect your pre-approval status. Don t make any new large purchases like furniture, cars, boats, etc.

By following these steps and obtaining a mortgage pre-approval, you ll be well-prepared to navigate the competitive real estate market and confidently make an offer on your dream home.

(Jeff Hammerberg is a distinguished entrepreneur and broker, and the founder of GayRealEstate.com. For more than 25 years, he has been a prolific writer, coach, and author who has been instrumental in advancing the cause of fair, honest, and equitable representation for all members of the LGBTQ community in real estate matters. GayRealEstate.com, which he established, is the largest and longest-running gay real estate agent referral service in the nation, boasting more than 3,500 LGBTQ Realtors who operate in cities across the United States. His commitment to promoting inclusivity and accessibility in real estate has earned him a reputation as a passionate advocate for the LGBTQ community.)

JEFF HAMMERBERG

is founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526 or jeffhammerberg@gmail.com.