Why Buyers Need Pre-Approval

WHY DO BUYERS NEED PRE-APPROVAL

  • Required to submit an offer, if they have not been pre-approved a seller will not consider their offer, no matter the amount.
  • Let’s the buyer know how much they can afford to purchase
  • Determines if there are any reasons why they cannot qualify such as credit issues, lack of funds, and income verification
  • Helps with the negotiation process 
  • It saves time in the closing process especially if documents have already been submitted to a lender

WHAT IS THE REQUIRED

  • Name as it appears on Driver’s License
  • Social Security Number/Date of Birth
  • Address History (2 years)
  • Work History (2 years)
  • Income Documentation (2 years)
  • Bank Account Information and Assets

DOCUMENTS REQUIRED

  • Tax Returns (2 years)
  • W-2’s
  • Bank Statements – Checking and Savings (2 months)
  • Pay stubs (30 days/maybe more)
  • Credit History
  • 2 year Work History
  • 2 year Residential History
  • Gift letters if parents, family member, or other approved party are giving money towards the down payment
  • Photo ID – Drivers License, Passport, or State Issued ID
  • Rental History – May require proof of payment

 WHAT DETERMINES A BORROWERS BUYING POWER?

  • Spending (current debt includes credit cards, leases, car loans, child support, alimony, student loans)
  • Down Payment (funds in checking, savings, retirement, and other liquid assets)
  • Expenses that go with buying (principal, interest, taxes, insurance, and HOA fees)

IF YOU FIND THIS ARTICLE HELPFUL, WOULD YOU LIKE MORE?

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