One thing you’re going to need if you’re trying to get a house is a mortgage. And to get a mortgage, you need to be pre-approved.
At this point, you should have saved up all the money you can for a down payment.
If you’re already pre-approved for a home loan, it signals to the loan officer, real estate agent and seller that you’re ready to purchase — and not playing around.
What Is The Best Way To Get Pre-Approved For A Mortgage?
The best way to get pre-approved for a mortgage is to have all your paperwork in order, but it includes more than that.
Your credit score is of paramount importance to a mortgage lender, but more on that later.
Follow These 3 Steps To Get Approved For A Mortgage
This article will go over the steps you need to get pre-approved so that you can get a mortgage.
First, let’s go over what a mortgage pre-approval is and how it works for you.
A mortgage pre-approval is a preliminary step to buying a home. It involves an initial offer from a lender to loan you a certain amount of money so that you can buy a home.
What Is A Mortgage Pre-Approval And How Does It Work?
The amount of money that the lender pre-approves is based on their evaluation of your three things:
- Your Creditworthiness
- Your Finances
- Your Job Outlook
A mortgage pre-approval will require that you hand over a lot of your personal information, including your Social Security number for a credit check and more.
1. Get Your Free Credit Report
The first step you need to do is get a free copy of your credit report. You can do that by going to AnnualCreditReport.com.
AnnualCreditReport.com is a government-backed website that shows you your credit reports from the Big 3 credit Bureaus: Equifax, Experian and TransUnion.
2. Shop Around for a Lender
Different lenders offer different mortgage products and may have different criteria for pre-approval. It’s a good idea to shop around and compare offers from multiple lenders to find the best terms for your situation
3. Get Your Credit Scores
You’ll also want to find out what your credit scores are from the Big 3 credit bureaus. If your credit scores are low with a particular credit-reporting agency or with all of them, you should try to improve them.
Here’s how to improve your credit score easily.
What Credit Score Is Needed For A Home Loan In Georgia?
In Georgia, as well as elsewhere, you’re going to need a credit score on the high end to qualify for a home loan.
According to Credit Karma, which uses the Average VantageScore 3.0 model, the national qualifying average credit score is 717. In Georgia, you’ll need a score around 700 to purchase a home.
f your credit score is lower than you’d like, take steps to improve it before applying for a mortgage. This can include paying down existing debts, making all your payments on time, and avoiding opening new lines of credit.
4. Have Your Financial Paperwork In Order
Before you get pre-approved, you’ll need some documents for verification purposes. These include:
- Social Security number
- W-2 or 1099 tax form
- Paycheck Stub
If you plan to have someone on the loan with you — perhaps a spouse or significant other — they will have to submit some personal information as well.
To apply for a mortgage pre-approval, you’ll need to provide various documents, including proof of income (such as pay stubs or tax returns), proof of assets (such as bank statements), and information about your debts (such as credit card balances and loan payments).
5. Get Pre-Approved!
Once you gather all of that financial information, you can submit it for mortgage pre-approval to your lender of choice.
Here’s a pro tip you might want to consider: Always try to get pre-approved with more than one lender. This increases your chances of getting pre-qualified exponentially.
Once you’ve chosen a lender, you can apply for pre-approval either online, over the phone, or in person. The lender will review your financial information and credit history to determine how much they’re willing to lend you and at what interest rate.
If you meet the lender’s criteria, you’ll receive a pre-approval letter stating the maximum amount you can borrow and the terms of the loan. This letter can be used to show sellers that you’re a serious buyer when making an offer on a home.
Once you’re approved, you can start to search for your dream home in Atlanta or any city you want to live in.
Conclusion
Your mortgage pre-approval is just that, a pre-approval. That means it still might not go through due to financial issues that come up.
Let’s say you lose your job during the pre-approval process. Then it’s a good chance, the lender will back out and your mortgage won’t be approved.
That’s why it’s a good idea to dispute any issues on your credit report or any other issues that come up. Here’s how to dispute your credit report.
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