Getting Pre-Approved before you start looking at homes is one of the many things Realtors recommend to prospective buyers.
The Pre-Approval process allows you, the buyer, to know what type of loans you qualify for and in what amounts. Knowing this number before looking at properties helps lower the amount of attachment buyers have to properties priced higher than they can afford. Seeing a property that fits like a dream home and then finding out you can’t afford it is very heartbreaking so get Pre-Approved before looking.
Having a Pre-Approval before looking also helps when writing up the Purchase Contract. When you make an offer to a seller you want to include a Pre-Approval letter for many sellers to even look at your offer. Imagine if you decided to get a Pre-Approval letter when you want to make an offer and end up having to wait 5 days before you get it.
Save yourself the trouble and get Pre-Approved before you start looking at property. Here are the list of documents that you will need for your lender when getting Pre-Approved
- W-2 forms — or business tax return forms if you’re self-employed — for the last two or three years for every person signing the loan.
- Copies of at least one pay stub for each person signing the loan.
- Account numbers of all your credit cards and the amounts for any outstanding balances.
- Copies of two to four months of bank or credit union statements for both checking and savings accounts.
- Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
- Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.
- Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
- Copies of your most recent 401(k) or other retirement account statement.
- Documentation to verify additional income, such as child support or a pension.
- Copies of personal tax forms for the last two to three years.
Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before making ANY decisions in ANY transaction.
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* THIS ARTICLE WAS POSTED AT Thomas Feng’s Bay Area Connect *