Va Home Loan Pre Approval Letter – Getting pre-approved for your mortgage is one of the first things you do when you’re serious about buying a home. The pre-approval is a promise from your lender that you will be approved for your mortgage, as long as the home meets specific requirements. Once you are pre-approved for your home loan, you will receive a pre-approval letter that will show home sellers that you are qualified to buy their home when you submit an offer to purchase. They will know you are a serious buyer.
During the pre-approval process, your lender will review and verify your financial information. He or she will carefully evaluate your credit, check your income and calculate your debts to determine the maximum loan amount you will be approved for and what interest rate you qualify for. After receiving your pre-approval, you’re ready to start working with an experienced buyer’s agent and previewing homes that meet all of your wants and needs.
Va Home Loan Pre Approval Letter
The pre-approval letter is good for 60-90 days. It is not a full guarantee that your loan will be approved, but it shows that your lender is confident in it.
How Long Does It Take To Get Va Loan Approval
You’ve probably heard the terms “pre-approval” or “pre-qualification” mentioned when discussing buying a home. Many people use these terms interchangeably as if they were the same thing. Both pre-approval and pre-qualification indicate a lender’s confidence in your ability to secure financing. It is important to know that they are related terms, but they represent different steps in the loan process.
Getting ‘pre-qualified’ should always be the first step you take when considering buying a home. The process is very easy and only takes a day or two. All you have to do is tell the lender how much money you make and how much assets/debts you have. The lender does not pull your credit report or require documentation of your finances at this time.
Pre-qualification gives you a good idea if you qualify and roughly how much money you qualify to borrow. This is a great step to take when you are in your initial phase of looking for homes online. It gives you an idea of what kind of homes and in what areas you can afford to buy.
This is where things get a little more serious and more involved. You’ll want to apply for a home loan and get pre-approved before you actually start looking at homes in person.
Mortgage Preapproval: How To Do It
The process involves completing a mortgage application and providing several pieces of financial documentation. The lender takes a much closer look at your finances for pre-approval than they do for pre-qualification. Pre-approval takes between one and three days. Once approved, you will receive a letter showing how much money you can finance and what rate you are being offered. The letter is good for 60-90 days.
Talking to a lender and having them pre-qualify you is a great first step. You will get a good idea if you are pre-approved for a mortgage. You may find that you still have work to do on your finances. You may have to take care of some credit issues to raise your credit score. You may need to save more money for your down payment. This may seem like bad news at first, but this information will help you get your finances to the level they need to be pre-approved.
Once you’ve consulted with a mortgage lender, you’ll have a good idea of what type of loan you have the best chance of being approved for. The loan product will determine the percentage of down payment you need. You will have a great chance of getting pre-approved if you can show proof of your down payment.
You may want to pull your free credit report to see your credit scores. You will also be able to review what accounts you have open and how much debt you have. Paying off debt and clearing delinquencies will quickly raise your credit. Pay attention to personal lines as well. Liens will ruin your chances of getting approved for a home loan.
Va Housing Pre Qualification Form: Fill Out & Sign Online
You may have good credit and low debt, but you may not have enough income to qualify. In this case, you may find someone to co-sign the loan with you. The combined income of you and the co-signer can bring you to the required income level. Many first-time home buyers have their parents or family members co-sign with them.
Once you’ve gone through the pre-qualification process and prepared your finances, it’s time to get pre-approved. You will officially apply for a mortgage. Completing the mortgage application is easy and is usually submitted online. You will need to provide information such as:
You will need to provide documentation to verify the information in your mortgage application. Here are the documents you need to send.
Lenders want to see that the income shown on your tax returns matches what is shown on your paychecks. This helps them to control income. You will most likely need to provide the last 2 years of returns. The lender may ask you to complete the 4506-T form, which allows them to order copies of your returns from the IRS.
Mortgage Services › United Bank
The tax returns will provide your lender with an overall picture of your income history. In addition to the tax returns, they will want to see your pay stubs covering the last month. The wages will show them to confirm that you are still employed and what your current income is. The lender may even contact your employer directly to confirm that you are actively applying.
Self-employed borrowers will need to provide 1099 forms as proof of income, as they are unlikely to receive pay stubs. The lender will also look at the bank statements for specific deposits to verify income as well. Documentation of other sources of income will be provided. These sources can include child support, disability, pensions, rental income, alimony, etc.
Lenders will assess the level of risk you represent as a borrower of their money. This is why they want to see what assets you have. You will provide them with 2-3 months of your statements for accounts including checking, savings, retirement, money market and brokerage accounts. They may even want to review assets such as life insurance.
The lender usually wants to see that you have assets to cover several months of mortgage payments in case something changes with your income. The more assets you have, the less risky you appear.
Understanding Loan Commitment And Why Do You Need One?
You will be asked to give permission for the lender to run your credit report. They will want to see how well you pay your bills or pay back the money you borrow.
According to Brady Benham, financial manager at Redondo Mortgage Center, lenders may ask you to provide a written explanation for any credit blemishes on your report. These can include delinquent accounts, short sales or foreclosures.
“Your written statement will help the lender further assess the level of risk you represent as a borrower,” says Benham. “Lenders look at habitual delinquency differently than a one-time situation that was out of your control.”
If you will be getting help from friends or family for your down payment, a donation letter will be required. The letter simply states the amount of the gift and that repayment is not required. The letter should be written by the person(s) giving you the money and their relationship to you should be identified.
Redondo Mortgage Center
Providing a photo ID such as a driver’s license, passport or military ID will verify that you are who you say you are. It also confirms that all your documentation is legitimate.
If you don’t own a home and pay a monthly mortgage, the lender may want to see proof that you pay rent on time. It is not unusual for a lender to ask for copies of rent checks that the landlord has collected in the past 12 months. They may also ask the employer to provide documents showing your time payments. If you don’t have a long history of credit, your rental history becomes very important.
Once you are pre-approved and have the pre-approval letter, you are now ready to submit offers to buy your dream home. The pre-approval letter shows a home seller that you have access to the money you are offering them for their home.
It is important to know that the pre-approval is not a guarantee of being fully approved to receive funds. You will want to be on your best financial behavior once you are pre-approved so that nothing major changes with your finances. Here is a list of activities and actions you should avoid until you close escrow on your home.
Mortgage Pre Approval & Closing Guarantee
Your lender will do a final check of your creditworthiness before closing on your mortgage loan. If the last check reveals that you have opened a new line of credit, it will cause
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