Pre-qualification and Pre-Approval
When considering buying a home, the first step is to investigate your financing options. To do so you
must first pre-qualify for a mortgage. A pre-qualification is an informal determination by a lender or
mortgage broker stating the amount of the mortgage you can afford.
After being pre-qualified you then want to be pre-approved. This is a guarantee in writing by a lender to
grant you a loan up to a specified amount, provided all of the loan conditions are satisfied. The pre
approval process requires a complete application with credit reports and verifications. Because there are
typically time limits placed on a pre-approval, it is recommended to be ready to look at homes after you
receive your guarantee. Below is a list of advantages to being pre-approved:
• By completing the steps to secure mortgage approval prior to signing a contract on a property the
length of time before closing can be shorter.
• You look at the “right” homes and avoid the disappointment of finding a home that you like but
can’t afford.
• You will close more quickly
• You are positioned to negotiate with a seller who typically won’t even look at an offer from a
buyer who isn’t pre-approved.
Items Needed for Loan Application
Personal
• Driver’s license (picture ID)
• Social Security Number
• Current Address & Previous addresses for the last 2 years
• Telephone Number
Employment
• Names and addresses for 2 full years
• Gross Monthly Income
• W-2’s for 2 years
• Year to date pay stub
If self employed:
Creditors
• Two years 1040 Tax Returns
• Current year profit and loss statement
• Credit cards – account numbers, balances and monthly payments
• Installment loans – account numbers, balances and monthly payments
• Child care expenses/support and/or child support
• List of any other liabilities
• Copies of bank statements from checking/savings accounts for last 3 months
• List of assets in stocks, bonds and property
• Life Insurance cash value
• Veterans- Form DD214 and Certificate of Eligibility if applicable
• Proof of child support or alimony
• Verification of other income (rentals, investments, pensions, disability or Social Security
