It is really a good thing to happen if one gets a pre-approved mortgage home loan. In simple terms, pre-approval basically means a kind of a promise from the money lender that a person can borrow a given amount of monies at a given rate of interest. This is after certain other terms and conditions have been met with. Thus, a person can pick up a home at a given amount without much of a fuss, thereafter. In the procedure leading up to this event, the money lender scrutinizes a few aspects very closely. First and foremost, he or she takes a thorough look at your credit and your income. If a person is given a pre-approved mortgage loan, the money lender supplies a pre-approval document to you. This letter basically says that the loan will be approved once you make a purchase offer on a home and provide these documents – the purchase contract, preliminary title information, appraisal and the income and asset documents as well. Pre-approval does not mean the loan will be given and this document too holds good only for a period of two to three months’ time. However, this time can vary depending upon the discretion of the money lender.
What does the term pre-approval actually signify?
In simple language, this term basically signifies that the money lender is sure of the fact that you have the capability to pay the amount of down payment along with mortgage payments which are to subsequently be given. At this given point in time, the one other criteria that still remains undecided is that the money lender should be sure that the value of the property gives a good collateral in proportion to the amount of the loan given. In lay person terms, this means that the home in question should be appraised for a sum of money which is more than or at least equal to that of the purchase price.
It is best that before a person applies for a pre-approval for a home loan, he or she checks his or her credit reports and credit scores as well. If you do this, you will have a good idea about the types of loans you will be liable to get and also will get enough time to sort out other financial intricacies. The good part is that getting a pre-approval is not that difficult a process. For this, you have to prep up to be able to offer data on your pay stubs, tax returns and W-2s for the last two years before you apply. Documents which provide proof of any add-on source of income must also be made available. These include proof of any second job you are doing, any kind of overtime money you are getting, any bonus or commission-based work that you are involved in and so on. In addition, keep ready all documents involving any other property you own as well as you different bank account statements.
For details contact: A Plus Mortgage Solutions, Inc. Call: (717) 796-0665.