Should I Get Preapproved?

It’s never too early to start!  The better prepared you are as a buyer, the better your chances of obtaining that home of your dreams!

Please keep in mind that not all lenders may have the same standards or definitions, so be sure to check with YOUR lender.

A borrower is preapproved once they have provided all supporting documentation to back up or support what was determined at the pre-qual stage. If a borrower is preapproved, the lender has pulled their credit and addressed any potential issues, has ran the loan through automated underwriting (AUS) and has obtained the items required per the “findings” from the AUS response. The borrower is providing all necessary income and asset documentation to the lender.

Once the lender has the required items, they will prepare a preapproval letter based on the borrowers financial scenario and what they are intending to offer as their bid on the home. A preapproval letter is often prepared by the loan officer and does not mean that an underwriter has reviewed the loan application.

Here is a list of documents you may be required to provide in order to obtain a preapproval:

  • Last two years W2s
  • Paystubs covering 30 days of income
  • Bank statements (all pages) and any asset accounts to document where your funds for closing are coming from (down payment and closing cost). Large deposits may have to be documented if not clearly documented on your bank statement.
  • Drivers license
  • Credit report (will be obtained by the lender)
  • Complete loan application.

If you pay or receive child support or alimony:

If you are paid commission or bonus income:

  • Last two years complete tax returns

If you are self-employed, be prepared to provide:

  • Two years complete business and personal tax returns
  • Year to date profit and loss statement

If you have investment properties:

  • Possibly pages 1 and 2 of your 1040 along with Schedule E (some lenders will require the entire tax return).
  • Rental agreements

If you receive Social Security or Disability Income:

  • Award letter
  • Documentation showing how long it will continue
  • Last three months bank statements showing receipt of income

VA Buyers:  Certificate of Eligiblity/DD214